Good progress in socio-economic development despite challenges, says DPM
VIENTIANE (Vientiane Times/ANN) - The implementation of the 2019 socio-economic and state budget plans has encountered many difficulties across Laos, a Deputy Prime Minister told the opening ceremony of the National Assembly session yesterday morning.
Dr Sonexay Siphandone, who is also Minister of Planning and Investment, said the macro-economy is under pressure because of budget and foreign transaction deficits and low foreign currency reserves, which have weakened the value of the kip and resulted in more expensive goods and services and higher living costs.
Fluctuations in the value of foreign currencies, insufficient control of product prices, and fragile domestic production are also obstacles to development.
Natural disasters such as floods, an invasion of caterpillars and outbreaks of African swine fever and dengue fever too posed big challenges for the state budget, especially funding to counter these problems.
Severe floods hit two central provinces and four southern provinces this year, resulting in widespread damage.
Caterpillars ravaged vast swathes of sweetcorn in several provinces, including Xayaboury. Swine fever killed thousands of pigs, and people were affected by dengue fever.
However, the government and local authorities have put in place measures to deal with disasters and other problems, and taken steps to stimulate the economy by improving the ease of doing business and other mechanisms, said Dr Sonexay.
The deputy prime minister also highlighted the government’s achievements, saying the administration had taken immediate steps to tackle emergency situations and disasters and to mitigate their impact to ensure that economic infrastructure and people’s living conditions improved rapidly. It received support and assistance for this work from people across the country and international organisations.
Dr Sonexay said implementation of the socio-economic development plan had made good progress in many fields despite expectations that gross domestic product would fall to 6.4 percent in 2019, a 0.3 percent drop compared to the plan for the year.
This year, the agriculture sector is expected to expand by about 2.8 percent. The livestock division is set to increase by 4.3 percent, forests by 0.8 percent, fisheries by 4.8 percent, and plantations by 2.3 percent.
Crop plantations are expected to decrease by 0.7 percent due to a delay in implementing the flood recovery plan in 2018. This also affected dry season crop yields and the wet season rice harvest in 2019, according to the report.
Growth in the industrial sector will be 7.1 percent, or 1.2 percent lower than the figure set in the plan for 2019. Food items, drinks, tobacco, textiles, clothes and leather products are among the sectors which experienced strong growth because of increased consumption within the country.
The construction sector will grow by 16.8 percent. The Laos-China railway and an expressway are under construction and will further boost this sector.
The expansion of the energy sector will be 6.1 percent, or 3.5 percent less than the figure predicted.
The services sector is set to grow by 7 percent, an increase of 0.4 percent over the planned figure for 2019. Retail and wholesale and vehicle repair services will be up by 19.9 percent, real estate by 6.7 percent, finance and insurance by 7.7 percent, and accommodation and food by 5.3 percent.
Laos expects to welcome more tourists due to 2019 being Visit Laos-China Year. This will support the growth of the services sector, hotels, restaurants, transport services and retail sales.
Dr Sonexay said that even though all these sectors recorded strong growth, they had not made high value additions to the economy and a large trade deficit remains because most products and materials are imported.
The tax and customs sector is expected to grow by 7 percent and achieve the target set in the plan for 2019.
Besides reporting on the implementation of the 2019 socio-economic and state budget plans, Dr Sonexay talked about the 2020 development plan and measures to ensure stability in politics and society, the overall economy, foreign currency exchange rates, prices of goods, and domestic production.