Lao Economy Expected to Grow3.6% in 2021: World Bank

Vientiane: The Lao economy is on course for moderately improved growth in 2021, despite the second wave of COVID-19 denting the promising economic recovery made early in the year, according to World Bank.
 
The World Bank’s latest Economic Monitor for Lao PDR — A Path to Recovery — predicts that GDP growth will rise to 3.6 percent in 2021, against a figure of 0.5 percent in 2020.
 
This forecast is down from the 4 percent growth projected in March 2021, and depends on various assumptions, including economic recovery in neighboring countries, accelerated vaccination rates nationwide, and mitigation of community outbreaks over the rest of the year. 

Growth could yet fall further if the covid-19 outbreak worsens and strong lockdown measures persist, or if Laos again suffers repeated natural disasters such as flooding, drought, or outbreaks of livestock disease.
 
Agriculture and industry are driving much of the growth, with agricultural exports increasing, while electricity, mining and manufacturing exports have rebounded from the trade slowdown last year. 
 
In tourism, hospitality, transport, and other services however, lockdowns and the continued curbs on international travel mean that most firms are struggling, depriving the country of a major income source.
 
"Lao PDR is doing well to contain the coronavirus and get vaccinations out across the population," said Alex Kremer, the new World Bank Country Manager, in a press release on Friday.
 
"However, the risk of debt distress, a weak kip, and low government revenues continue to limit the government’s options for reviving the economy. Reforms that would boost private investment, tax payments, and trade would help in this matter," he added.
 
According to the report, the falling value of the kip is causing inflation to rise, which in turn has led to worries about access to food and basic goods. 
 
This problem is particularly pressing for poor people in towns and cities. 
 
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