2017年-世界发展银行全球_Lao_PDR_Economic_Monitor_December_2017___Lowering_Risks_and_Reviving_Growth_49页_1mb

Lao PDR Economic Monitor Summary (December 2017)

Core Content

The Lao PDR Economic Monitor for December 2017 provides an overview of the country's macroeconomic developments and highlights the role of the power sector in driving growth and investment. It outlines both the achievements and the challenges facing the economy, emphasizing the need for improved fiscal management, a more robust private sector, and sustainable development in key industries.

Main Points

1. Economic Growth and Outlook

• Growth Moderation: GDP growth is projected to moderate to 6.7% in 2017, below historical averages but closer to a sustainable level.
• Drivers of Growth: Continued expansion in the power sector, manufacturing, and agriculture contributed to growth.
• Weaknesses: Flat mining output, moderating construction, lower public service contributions, and weaker-than-expected tourism performance are key constraints.
• Regional Comparison: Growth remains robust, close to the average for the developing East Asia and Pacific (EAP) region.
• Inflation: Headline inflation declined further in 2017 due to falling food prices and slowing aggregate demand, despite a recovery in oil prices.
• Poverty Reduction: Improved agriculture and manufacturing output supported poverty reduction, with poverty rates expected to fall from 18% to 13%.
• Disparity: The bottom 40% of the population benefited less from growth, highlighting inequality concerns.

2. Macroeconomic Management

• Fiscal Deficit: The fiscal deficit is expected to be around 4.4% of GDP, close to last year’s level and below the initial 2017 projection of 5.4%.
• Public Debt: Public debt is projected to reach almost 60% of GDP in 2017, with external debt increasing in less concessional terms.
• Revenue and Expenditure: Despite strong performance in VAT and non-tax revenues, revenue shortfalls were partly offset by expenditure adjustments.
• Exchange Rate Flexibility: Greater flexibility in the Lao kip (LAK) helped reverse earlier appreciation, narrowing the gap between official and parallel market exchange rates.
• Reserves Adequacy: The reserves-to-foreign currency deposits ratio remained below 25%, indicating a thin buffer.
• Credit Growth: Credit growth decelerated to 17% in June 2017, driven by tighter fiscal space and regulation on foreign currency lending.
• Financial Sector Weakness: Some banks remain undercapitalized, and profitability remains low, posing risks to financial stability.

3. Policy Considerations

• Fiscal Discipline: Maintaining fiscal discipline and bold fiscal consolidation is critical to lowering debt risks.
• Private Sector Development: A vibrant private sector is essential for sustainable growth, as the current growth model relies heavily on natural resources and public spending.
• Business Environment: Lao PDR lags behind in several areas of the Doing Business indicators, including starting a business, paying taxes, and protecting minority investors.
• Reforms Needed: Strengthening tax administration, improving spending efficiency, and reducing fiscal slippage are necessary steps.
• Public Investment: Loan-financed public investment should be examined and scaled back to avoid overburdening the public sector.
• Debt Management: Institutional reorganizations and legal frameworks for public debt management are being strengthened.

Key Sector: Power Sector

1. Role in Growth

• The power sector has been a major driver of growth and investment over the past two decades.
• Installed capacity is expected to rise from 6,800 MW in 2017 to 11,000 MW by 2021, driven by hydro, thermal, and other energy sources.
• Electricity exports to Thailand and parts and components exports from SEZs have been strong.

2. Fiscal and Debt Impact

• The power sector's contribution to government revenue is modest, due to fiscal incentives and debt servicing.
• The sector has generated significant debt and contingent liabilities, particularly through public-private partnerships (PPAs) and infrastructure projects.
• EdL (Electricité du Lao) needs to explore economical and non-debt creating ways to complete the infrastructure gap.

3. Risks and Recommendations

• Growing Risks: The power sector's expansion has led to increased debt and contingent liabilities, raising concerns about sustainability.
• Recommendations:
  • Strengthen power system planning and project selection to ensure economic viability and fiscal sustainability.
  • Improve financial and corporate management of public entities in the power sector.
  • Secure well-paying markets for growing electricity to lower risks.
  • Explore options to reduce liabilities under PPAs and enhance infrastructure development.

Conclusion

The Lao PDR economy is gradually moderating, with growth remaining robust but less reliant on natural resources. While the power sector has been a key growth engine, it also poses fiscal and debt risks. Addressing macroeconomic vulnerabilities and improving the business environment are priority tasks for the government to ensure sustainable and inclusive growth. The 2018 Budget is expected to include modest fiscal adjustments, but more meaningful reforms are needed to stabilize the economy and support long-term development.