Laos' Reforms Can Strengthen, Sustain Inclusive Growth | Lao Tribune

Laos’ Reforms Can Strengthen, Sustain Inclusive Growth

The Lao PDR’s economy is projected to expand at around 7 percent annuallybetween 2017 and 2019, higher than other countries in the region, according to the latest edition ofthe World Bank’s Lao Economic Monitor.

TheWorld Bank launched its Lao Economic Monitor 2017 report was launched in Vientiane on Wednesday, 24 May.

The country’s growth has moderated from historical averages and is driven by a pipeline of power projects and recovery in the agriculture and manufacturing sectors, as well as new opportunities prompted by closer regional integration.

According to the report, inflation pressures remain low, while credit growth has stabilised over the pastyear. Expansion of the power sector is expected to increase power exports, while non-resourcesectors such as tourism, trade and financial services are expected to benefit from closer regional integrationand improved connectivity.

The country can adopt reforms that will help sustain high growth and address some potential risks. Exports and investment inflows may be impacted by economic and policy uncertainty in the region.

The widening of the deficit to around 6.2 percent of Gross Domestic Product (GDP) in2016 pushed public debt up to an estimated 68 percent of GDP.

Improved revenue collection and efficiency in spending, as well as adjustments in monetary and exchange rate policies, complemented by strengthening the oversightcapacity oftheBank of the Lao PDR, would help in maintaining stability.

The Lao PDR has maintained strong economic growth, which is asignificant achievement, said WorldBank Country Manager for Lao PDR Sally Burningham. Reforms to improve tax administration andthe efficiency of public spending can strengthen and sustain this growth – and that would translate intobetter healthcare, education, quality of life, and opportunities for families and communities across the country.

Although the Lao PDR has achieved strong economic development over the past decade, higher investment in human development, particularly health services,is a priority. High out-of-pocket spending deters the poor from using health services, which increases their vulnerability. Rates of maternal and child mortality in the Lao PDR remain high.

An increase in government spending on health services, combined with measures to enhance theefficiency and effectiveness of this spending, will be critical for the country’s efforts to attain universalhealth coverage by 2025 and improve health outcomes across the population.

We support the recent increase in the country’s health budget, and encourage more to be done, asoverall public sector spending on health care remains low, with average expenditure per capita amongthe lowest in the region. The government’s efforts to improve health-care services would brighten thefuture opportunities of this generation and the next, saidMsBurningham.

The Lao Economic Monitor is a periodic publication developed by the World Bank office in the Lao PDR.

Source: Lao News Agency