2016年-世界发展银行全球_Lao_Economic_Monitor_May_2016___Challenges_in_Promoting_More_Inclusive_Growth_and_Shared_Prosperity_44页_4mb

Summary of Lao Economic Monitor (May 2016)

Core Content

The Lao Economic Monitor for May 2016 provides an overview of the country's economic developments and the drivers of poverty reduction. It highlights the challenges in achieving more inclusive growth and shared prosperity, despite strong GDP growth rates.

Main Points

Economic Growth

• GDP Growth: Lao PDR's economy grew by about 7% in 2015, a slight slowdown from 7.5% in 2014.
• Growth Drivers: Resource sectors, particularly hydropower and extractives, have been the main contributors to growth.
• Power Sector: The commissioning of the first two blocks of the Hongsa lignite power plant (1,878 MW) and additional hydro capacity boosted power generation.
• Mining Output: Despite lower global prices, mining output increased, mainly due to metal prices remaining above cost recovery levels.
• Construction: Continued robust growth due to strong capital inflows (FDI and loans) into the power and real estate sectors.
• Manufacturing and Exports: Slight increase in manufacturing and exports of parts and components, driven by a few companies relocating production to Lao PDR's special economic zones (SEZs).
• Tourism: Strong growth in tourist arrivals, mainly from the region, supported by improved air transport connectivity.

Inflation

• Annual Inflation: Fell from 4.2% in 2014 to 1.3% in 2015 and further to 1.1% in March 2016.
• Core Inflation: Remained around 1.7%, driven by declining fuel prices.
• Food Inflation: Contributed to inflation, but was mitigated by the drop in fuel prices.

Fiscal Developments

• Fiscal Deficit: Estimated at 3.7% of GDP in FY14/15, down slightly from 3.8% in FY13/14.
• Government Revenues: Declined as a percentage of GDP from 24.1% to 23%, due to lower commodity prices and reduced grants.
• Government Expenditures: Reduced from 28% to 26.6% of GDP, thanks to tight control over public spending and the wage bill.
• Public Debt: Reached about 65% of GDP in 2015, equivalent to US$7.7 billion. The issue of public sector arrears persists, suggesting that domestic public debt may be understated.
• Reforms: The revised State Budget Law in 2015 increased the National Assembly's role in budget oversight and improved budget management by the Ministry of Finance.

External Sector

• Current Account Deficit: Widened slightly to 11.6% of GDP in 2015.
• Exports: Increased in manufacturing and parts and components, but were offset by declines in copper and gold prices.
• Imports: Remained contained due to depressed oil prices, though some imports are related to FDI in the resource sector.
• Foreign Reserves: Rose to almost US$990 million, covering about 2.2 months of imports, but remained low against prudential standards.

Exchange Rate and Monetary Policy

• Exchange Rate: The kip appreciated against regional currencies due to tight management by the Bank of Lao PDR (BOL).
• Monetary Policy: BOL reduced the discount rate and introduced inflation-linked caps on deposit and lending interest rates, leading to a decline in both rates by about 3 percentage points.
• Credit Growth: Increased slightly in the second half of 2015, but remained below earlier levels at 17% YoY.
• Financial Sector: Some state-owned banks may be facing declining capital buffers and deteriorating loan portfolios.

Outlook

• 2016 Growth: Expected to remain around 7%, supported by strong power generation and continued manufacturing growth.
• Downside Risks: Include a sharper slowdown in China, weak growth in Thailand, and further declines in commodity prices.
• Public Debt Sustainability: Expected to improve through fiscal consolidation, including broadening the revenue base and improving spending efficiency.

Key Information

• Poverty Reduction: Poverty in Lao PDR declined from 33.5% in 2002/03 to 23.2% in 2012/13, helping the country achieve its MDG target of halving extreme poverty by 2015.
• Poverty Reduction Rate: The rate of poverty reduction was slower than economic growth, with consumption growth lagging behind GDP growth.
• Income Inequality: Increased, as the richest group saw a 2.4% increase in consumption compared to 1.3% for the poorest.
• Key Poverty Drivers: Education attainment, non-farm employment, and better connectivity (especially road access in rural areas) have been important in reducing poverty.
• Employment Trends: Only 80% of jobs created were non-farm, and most were in low-productivity sectors like trade and services.
• Agriculture: Still dominates employment (64% in 2013), but productivity remains low, contributing to high malnutrition rates.
• Social Safety Nets: Limited coverage and low financial inclusion make households vulnerable to shocks, especially in agriculture and health.
• Special Economic Zones (SEZs): Attracted foreign investment and some manufacturing activity, with a significant share of labor being foreign.

Conclusion

While Lao PDR has experienced strong economic growth, the benefits have not been evenly distributed. Poverty reduction has been slow, and the growth model has not translated into significant job creation or income distribution improvements. To achieve more inclusive growth, the country needs to improve productivity in agriculture and non-farm sectors, enhance the business environment, and establish effective social safety nets. The role of SEZs in attracting foreign investment and creating employment is promising but still limited in scope. The outlook for 2016 remains positive, but risks such as external demand slowdown and domestic financial sector instability must be addressed to ensure sustainable and inclusive growth.