Laos economy damaged by flooding

15 Aug 19

Laos’ economic growth is recovering from a setback caused by last year’s floods, according to the World Bank.

Between July and September 2018, flooding caused by storms cost the south-east Asian country’s economy about $371.5m in damage and losses.

Growth slowed from 6.9% in 2017 to 6.3% last year, but the World Bank projects it will reach 6.5% this year.

The monitoring report released on Monday credits the construction sector, investments in large infrastructure projects and a “resilient services sector” for the improved performance.

The budget deficit is expected to decline slightly (from 4.4% last year to 4.3% in 2019), owing to “efforts to strengthen revenue administration and the legal framework”, according to the report.

Public debt is also expected to go down, from 57.2% to 55.5% of gross domestic product.

Nicola Pontara, World Bank country manager for Laos, said: “Strengthening revenue collection is important to create fiscal space and reduce the burden of public debt.

“Looking forward, it will be important to improve the business environment to support private sector development, including the growth of small and medium enterprises.

“These measures can contribute to maintaining a stable macroeconomic environment, promoting job creation and reducing poverty and inequality.”

In the report, the World Bank recommended Laos continues to strengthen its management of public debt, and to try to make it easier for small and medium businesses to grow, particularly in non-resource - such as cars, consumer goods and electronics - sectors.

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