2012年-世界发展银行全球_Sustaining_Robust_Growth_Mitigating_Risks_and_Deepening_Reforms___Lao_PDR_Economic_Monitor_May_2012_24页_5mb

Summary of Lao PDR Economic Monitor - May 2012 Update

Core Content

The Lao PDR Economic Monitor May 2012 Update provides an overview of recent economic developments and structural reforms in the country. It highlights the positive outlook for 2012 growth, the impact of external market uncertainties, and the government's fiscal and policy initiatives to ensure sustainable development.

Main Points

1. Economic Growth and Inflation

• Growth Outlook: The Lao PDR is expected to grow by 8.3% in 2012, driven by expansion in construction, manufacturing, mining, and services.
• Construction Boom: Supported by preparations for the 9th Asia-Europe Meeting (ASEM) in Vientiane.
• Agricultural Recovery: Expected to rebound after the adverse effects of 2011 floods.
• Inflation Trends:
  • Headline inflation decreased from 7.9% (yoy) in November 2011 to 4.4% in April 2012.
  • Food inflation dropped from 10.7% to 6% due to lower rice prices, although meat prices remained high.
  • Energy inflation slowed, from 25% in November 2011 to 3.7% in April 2012, due to base effects and fuel price caps.
  • Core inflation began rising in April 2012, influenced by higher housing, electricity, and hospitality prices.

2. Government Revenue and Expenditure

• 2011/12 Budget:
  • Increased exposure to hydropower and mining revenues.
  • Fiscal deficit is projected to rise to 3.2% of GDP from 2.7% in 2010/11 due to higher public spending.
  • Domestic revenue remains at 16.9% of GDP despite increased resource sector revenue.
• Non-Resource Revenue:
  • Expected to grow below GDP, reducing its share from 13.2% to 12.6%.
  • Non-resource and non-mining deficits are projected to increase from 10.7% and 10% to 12.6% and 11.6% respectively.
• Fiscal Outlays:
  • Projected to rise from 23.9% to 25.2% of GDP due to flood recovery, ASEM preparation, and poverty reduction projects.
  • Recurrent expenditure is expected to increase, driven by wage hikes and allowances for public services in remote areas.

3. Public Debt

• External Public and Public Guaranteed (PPG) Debt:
  • Multilateral creditors account for 60%, with ADB (33%) and World Bank (IDA) (21%) being the largest contributors.
  • Bilateral creditors (mainly China, Russia, Thailand) account for 36%.
  • Emerging market creditors (especially China) are increasing their role, emphasizing the need for debt management improvements.
• Domestic Public Debt:
  • BOL lending accounts for 82% of total domestic debt.
  • Government bonds are used to finance state-owned bank recapitalization.
  • In 2012/13, the government plans to issue 1.6 trillion LAK (US$200 million) in bonds to support increased expenditure.

4. External Balance

• Balance of Payments (BOP):
  • Expected to slightly improve in 2012 due to higher FDI and transfers outside the resource sectors.
  • Resource sector BOP surplus is projected to decline from 12.6% to 11% due to higher income repatriation from mining.
• Mining Sector:
  • Income repatriation is expected to reach US$950 million in 2012, up from US$680 million in 2011.
  • FDI is projected to increase, with capital imports rising by 28% (yoy) due to investments in large power projects.
• Trade:
  • Imports are expected to rise, particularly of consumption and capital goods, driven by ASEM preparations.
  • Trade deficit will be partly offset by foreign investments in hotels, manufacturing, and construction.

5. Monetary and Financial Sector Developments

• Exchange Rate:
  • Lao Kip (LAK) appreciated against the US Dollar (0.3%) and Thai Baht (1.0%) due to strong demand and foreign exchange inflows.
• Credit Growth:
  • Private credit growth slowed in 2011 due to base effects and liquidity constraints.
  • Lending to state-owned enterprises increased from 53.4% (yoy) in 2010 to 60.8% in 2011.
  • Non-performing loans declined to 2.18% from 3.2% in 2010.
• Financial Reforms:
  • Treasury zero-balance accounts reform progressed with the transfer of major accounts to the National Treasury.
  • Customs Law was revised in December 2011, and the ASYCUDA World System is now in place at the Thanaleng/Friendship Bridge.
  • One-stop service implementation for businesses began in October 2011, as per the Enterprise Law and Investment Promotion Law.
  • The World Trade Organization (WTO) accession process has gained momentum, particularly with EU and US negotiations.

6. Medium-Term Outlook

• Growth Projection (2013–2015):
  • Expected to average 7.5% annually, based on non-resource sector growth, successful hydropower projects, and sustained demand from Developing Asia.
• External Market Uncertainty:
  • The Euro area crisis, China's slowdown, and global price volatility pose risks to the medium-term outlook.

Key Information

• ASEM Preparation: Includes construction of a convention center, Wattay International Airport expansion, and upgrades.
• Flood Recovery: The government allocated 400 billion LAK (US$50 million) for recovery efforts.
• Fiscal Policy: The government aims to keep the budget deficit below 5% of GDP and is committed to on-budget repayment of past off-budget commitments.
• Tax Reforms: The General Tax Law was revised to introduce a presumptive tax regime for small businesses, eliminating minimum business tax.
• Debt Management: The increasing role of emerging market creditors highlights the need for improved debt sustainability and management capacity.

Conclusion

The Lao PDR is experiencing robust growth in 2012, supported by key sectors such as construction, manufacturing, mining, and services. While inflation is trending downward, core inflation is rising due to increased prices in housing, electricity, and hospitality. The government's fiscal policy is focused on controlling deficits, enhancing revenue collection, and promoting social services. Structural reforms in public finance, customs, and trade are progressing, and the country is working to improve debt management and strengthen financial sector development. Despite the positive outlook, external market uncertainties and global economic conditions remain key challenges for the medium-term growth trajectory.