2010年-世界发展银行全球_Lao_PDF_Economic_Monitor_September_2010_Update___Managing_Macroeconomic_Balances_to_Sustain_High_Economic_Growth_12页_2mb

Lao PDR Economic Monitor - September 2010 Summary

Core Content

The Lao PDR Economic Monitor for September 2010 provides an analysis of recent economic developments and the medium-term outlook for the country, highlighting key performance indicators, inflationary pressures, fiscal policy adjustments, and external balance issues.

Main Points

1. Economic Growth

• Strong Growth: Lao PDR's economic growth is projected at 8.5% in 2010, up from 7.5% in 2009.
• Resource Sector Contribution: The resource sector is expected to contribute about 4 percentage points to GDP growth, with:
  • Electricity, water, and gas contributing 3.2 percentage points.
  • Mining (copper and gold) contributing 0.8 percentage points.
• Non-Resource Sector: Performing well, with manufacturing and construction showing strong growth. Garments are starting to rebound.
• Services Sector: Contributes 2.5 percentage points to growth, with tourism showing recovery, as tourist arrivals increased by 26% in the first half of 2010, especially from Europe and America (up by 64%) and Asia-Pacific (up by 22%).

2. Inflation Dynamics

• Headline Inflation: Rose to nearly 8% in August 2010, driven by rising food prices.
• Food Price Increase:
  • 14% y-o-y increase in food prices, contributing 5.7 percentage points to inflation.
  • Rice prices (especially glutinous rice) surged by 49.2% y-o-y, contributing 8.8 percentage points.
  • Vegetables increased by 11%, and other food items contributed 3.9 percentage points.
• Core Inflation: Increased slightly to 3.4%, driven by sustained demand for consumption goods.
• Fuel Prices: Rose by 20%, but had limited impact on rice prices.
• Imported Inflation: Contributed due to kip depreciation against the Thai Baht (4.6%) and Thai inflation (3.3%).
• Price Drop Outlook: Rice prices are expected to decline from mid-October, with traders offering 3,500 kip per kg in late September.

3. Food Price Impact on Households

• Household Impact: Varies by group:
  • Net food producers may benefit from higher prices.
  • Small-scale subsistence farmers are less affected.
  • Landless rural households and poor urban households are the most vulnerable.
• Self-Production: Rural households produce 40-60% of their food, while urban households rely mostly on purchased food (about 9%).
• Malnutrition Concerns: Despite rising food prices, food shortages are unlikely to worsen malnutrition, as other factors like breastfeeding, complementary feeding, and diarrhea are more significant contributors.

4. Fiscal Policy Adjustments

• Fiscal Deficit: Expected to decline from 6.6% of GDP in FY2009 to 4.8% in FY2010.
• Revenue Performance: Revenues for the first three quarters of FY2010 reached 85% of the annual target, driven by higher tax and customs revenue.
• Domestic Revenue to GDP: Expected to rise to 14.6% in 2010 from 13.7% in 2009.
• Wage Bill: Projected to fall to 4.6% of GDP in FY2010 from 5.4% in FY2009, due to a moderate increase in nominal wage bill.
• Capital Expenditure: Expected to decline to 5.7% of GDP in FY2010 from 6.6% in FY2009, due to prudent spending.
• Government Exit Strategy: Includes on-budget repayment of local projects financed through off-budget BoL loans.

5. External Balance

• Current Account Deficit: Expected to decline to 9.6% of GDP in 2010 from 13.8% in 2009, due to strong resource exports.
• Export Growth:
  • Resource exports are projected to grow by 54%.
  • Electricity (NT2) grew by 150%, and mining by 40%.
  • Non-Resource Exports are expected to grow by 11%, driven by demand from China, Thailand, and Vietnam.
• Total Export Value: Expected to reach US$2 billion in 2010.
• Import Growth: Projected to grow by 9%, mainly due to non-resource sector demand.
• Non-Resource Current Account: Expected to deteriorate to 20.8% of GDP in 2010.

6. Net Capital Inflows

• Decline in FDI: Projected to fall to $631 million in 2010 from $771 million in 2009.
• Sector Trends:
  • Hydropower: FDI will rebound in 2011 with new projects.
  • Mining: FDI is rebounding in 2010, and will increase further in 2011.
  • Non-Resource Sector: Expected to follow the same trend, responding to strong regional demand and high commodity prices.

7. Monetary Sector Developments

• Exchange Rate Policy: The government is pursuing a stabilized exchange rate regime, with a ±5% fluctuation against major currencies.
• Kip Appreciation/Depreciation:
  • Appreciated by 4.5% against the US dollar.
  • Depreciated by 4.6% against the Thai Baht.
• Reserve Levels: Declined Q-to-Q by 12.3% and y-o-y by 7.3% by June 2010, to US$558 million.
• Net Foreign Assets: Declined by 11.4% Q-to-Q and 27.2% y-o-y.
• Credit Growth: Slowed to 60% y-o-y in June 2010 from 90% in March.
• Private Sector Credit: Grew by 52.6% in Q2 (down from 86.5% in Q1).
• Central Bank Lending: Increased by 84.4% in Q2 (down from 98.3% in Q1).
• Monetary Growth: Broad money (M2) growth slowed to 26% y-o-y in Q2 2010 from 28% in Q1 and 31% in end-2009.
• Interest Rate Spreads:
  • Kip interest rates for 1 year: 14.36%.
  • USD interest rates for 1 year: 8.54%.
  • Interest rate spreads for kip declined from 7.82% in 2008 to 5% by mid-2010.

Key Information

• Document Focus: Highlights economic performance, inflation, fiscal policy, and external balance in Lao PDR for 2010.
• Prepared by: The World Bank Office in Lao PDR, with input from the Lao government.
• Authors: Somneuk Davading (Country Economist), Keomanivone Phimmahasay (Research Analyst), under the supervision of Genevieve Boyreau and Mathew Verghis.
• Email Contacts:
  • Somneuk Davading (structure and content): sdavading@worldbank.org
  • Keomanivone Phimmahasay (data issues): kphimmahasay@worldbank.org
• Document Date: September 2010.

Conclusion

The Lao PDR economy showed strong growth in 2010, driven by resource sector performance and increased regional demand. However, rising food prices contributed significantly to inflationary pressures, with glutinous rice being the main driver. Fiscal adjustments are underway to reduce deficits and rein in credit growth, while external balance is expected to improve due to strong exports and moderate import growth. Monetary policy is focused on stabilizing the kip and reducing dollarization, with interest rate spreads showing a decline. Challenges remain, particularly in maintaining food price stability, improving banking supervision, and managing external risks.