2011年-世界发展银行全球_Lao_PDR_Economic_Monitor_December_2011___Sustaining_Growth_Coping_with_Rising_Uncertainty_21页_2mb

Lao PDR Economic Monitor - December 2011 Update Summary

Core Content

The Lao PDR Economic Monitor for December 2011 provides an analysis of recent economic developments and the medium-term outlook for the country, highlighting key trends in growth, inflation, government revenue and expenditure, external balance, and the monetary sector.

Main Points

1. Economic Growth and Inflation

• The Lao PDR economy grew at 8% in 2011, slightly revised from an initial estimate of 8.6%.

• The revision was due to:

  • Adverse impacts of typhoons Haima and Nock Ten on agriculture.
  • Effects of Thailand's flooding on tourism and trade.
  • An upward revision of 2010 GDP due to higher electricity output from the Nam Theun 2 project.
  • The commencement of operations at the Nam Ngum 2 hydropower dam.

• Headline inflation dropped from 9.8% (May 2011) to 6.6% (YOY, October 2011), mainly due to slower food price growth.

• Food inflation fell from 14% (May 2011) to 8.1% (YOY, October 2011), influenced by rice price decline and government rice reserve use.

• Energy inflation remained high at 26.2% (YOY, October 2011), following international trends.

• Core inflation increased to 5% (YOY, October 2011) due to strong domestic demand in housing, water and electricity, and tourism.

• Inflationary pressure is expected to persist due to international oil and commodity price movements and recovery from flooding in Lao PDR and neighboring countries.

2. Government Revenue and Expenditure

• Fiscal deficit decreased from 4.6% of GDP (FY09/10) to 2% of GDP (FY10/11) due to mining and hydropower revenues and reduction in off-budget expenditures.

• Off-budget spending is expected to drop from 2.8% of GDP (FY09/10) to 1.4% (FY10/11).

• Non-mining and non-resource deficits are projected to fall from 10.7% and 11.1% (FY09/10) to 9.7% and 10.4% (FY10/11) respectively.

• Total domestic revenues are expected to exceed the target, rising to 15.2% of GDP (FY10/11) from 14.2% (FY09/10).

• Resource revenues are likely to double from 2.1% of GDP (FY09/10) to 4.2% (FY10/11) due to rising commodity prices.

• Non-resource revenues have slowed, with a nominal increase of only 3.2% and a decline in share of GDP from 12.2% to 11%.

• The government is focusing on tax collection and revenue centralization to maintain diversification and fiscal stability.

3. External Balance

• The overall balance of payments (BOP) surplus is expected to narrow from 1.3% of GDP (2010) to 0.2% (2011).

• The resource BOP remains in surplus, driven by:

  • Electricity and mining exports.
  • Capital account surplus from large projects like NT2, Nam Ngum 2, Hongsa Lignite Power Plant, and Phubia mining.

• The resource current account surplus declined from 5% (2010) to 4.6% (2011) due to net income transfers (dividends, profit repatriation, interest payments) from the mining sector.

• The resource capital account surplus is projected to rise to 10% of GDP (2011) from 7.3% (2010).

• The non-resource BOP deficit is expected to widen to 18.6% of GDP (2011) from 14.1% (2010).

• Non-resource trade deficit is the main driver, increasing to $2,050 million (2011) from $1,500 million (2010).

• Non-resource exports are expected to grow by 21% or $820 million, primarily from garments, wood products, and agriculture.

• Non-resource imports will grow faster than exports at 25.1%, driven by capital and consumption goods.

4. Monetary Sector

• Credit growth slowed to 33.2% (YOY, June 2011) from 63% (June 2010) and 46% (December 2010).

• The slowdown was attributed to reduced BOL lending to infrastructure and constrained bank liquidity for long-term credits.

• Non-performing loans remained at 3% as of June 2011, similar to the end of 2010.

• Broad money (M2) grew by 40.9% (YOY, June 2011), driven by strong deposit growth and economic performance.

• To curb inflation, the BOL issued $340 million in securities to absorb excess liquidity, while reserve requirements remained unchanged.

• The de-dollarization rate dropped slightly to 44.5% (June 2011) from 46.2% (end-2010).

Key Information

• The government is committed to a low budget deficit policy, with targets set for FY11/12:
  • Domestic revenue: ~16.2% of GDP (excluding grants).
  • Government expenditure: ~22.6% of GDP.
• The risk of debt distress remains high, despite the decline in external PPG debt from 82% of GDP (2005) to 51.8% (2010).
• The latest Debt Sustainability Analysis (June 2011) highlights concessionality and low debt service ratios as key concerns.
• Foreign exchange reserves increased by 28.7% (YOY, June 2011) to $719 million, with net foreign assets (NFA) rising to $911 million.
• The country's external position is expected to slightly improve by year-end, with reserves and NFA reaching $750 million and $950 million respectively.

Conclusion

Lao PDR continues to experience strong economic growth despite external challenges such as typhoons, flooding, and global uncertainty. While inflation has decelerated, core inflation remains elevated. The government is focusing on fiscal discipline, diversification of revenue sources, and reducing off-budget spending. However, non-resource sectors face revenue challenges, and debt sustainability remains a concern. The external balance is shifting, with resource sectors contributing to surpluses, while non-resource sectors face wider deficits. The monetary sector is showing signs of stability, but credit growth and inflationary pressures remain key monitoring areas.