Laos needs about 27 per cent of gross domestic product (GDP) for development next year to ensure the country’s steady economic growth.

Of this amount, 4.750 trillion kip ($537 million), or 10.2 per cent of the total, will be taken from the domestic budget, Deputy Prime Minister and Minister of Planning and Investment Sonexay Siphandone informed the National Assembly earlier this month.

The government’s investment using Official Development Assistance (ODA) is 8.125 trillion kip, accounting for 17.5 per cent of total investment.

Investment by the domestic, private and foreign sectors will be 23.125 trillion kip, accounting for 49.7 per cent of the total and 10.500 trillion kip or 22.6 per cent of the total from financial and currency systems.

Next year, the government will attempt to further grow the economy, with the growth forecast for GDP at least 6.5 per cent, GDP per capita set to hit 177.780 billion kip, and gross national income per capita reaching $2,161.

The agriculture, forestry and rural development sector should grow by 2.7 per cent accounting for 15.2 per cent of GDP, industry by 7.3 per cent or 32.03 per cent of GDP, and the services sector by 6.9 per cent or 41.47 per cent of GDP, in addition to 7.5 per cent from tariffs or 11.31 per cent of GDP, Dr Sonexay said.

This year, the government initially forecast national GDP growth of at least 6.7 per cent, with GDP per capita set to hit $2,726 but now expects GDP to grow only 6.4 per cent with $2,677 per capita, he added.

The main reason for the downgrade in growth is the impact of flooding, disease outbreaks, and the longer than usual dry season.

The agriculture, forestry and rural development sector is expected to achieve the target at 2.8 per cent, 7.1 per cent for industry 1.3 per cent below the planned 8.3 per cent, the services sector is expected to grow at seven per cent or 0.4 per cent better than the projected 6.6 per cent, while the customs sector is projected to reach the seven per cent target.

To ensure economic sustainability, the government requires active and transparent coordination between the various sectors and central and local administrations, particularly with regard to revenue collection, disaster prevention and financial management.

The roles and duties of some state organisations will be improved to ensure that responsibilities do not overlap and job descriptions are relevant.

In addition, the government has introduced measures to improve the business climate and attract knowledge-based business operators.