Laos needs about 46,500 billion kip of investment or 27 per cent of Gross Domestic Product (GDP) for development in 2020 to ensure the country’s steady economic growth.

Of this amount, 4,750 billion kip, or 10.2 percent of the total, will be taken from the domestic budget, Deputy Prime Minister and Minister of Planning and Investment, Dr Sonexay Siphandone, informed the National Assembly last week.

The government’s investment using Official Development Assistance (ODA) is 8,125 billion kip, amounting to 17.5 percent of total investment.

Investment by the domestic, private and foreign sectors will be 23,125 billion kip, accounting for 49.7 percent of the total and 10,500 billion kip or 22.6 percent of the total from financial and currency systems.

Next year, the government will attempt to further grow the economy, with the growth forecast for GDP at least 6.5 percent, GDP per capita set to hit 177,780 billion kip, and Gross National Income per capita reaching US$2,161.

The agriculture, forestry and rural development sector should grow by 2.7 percent accounting for 15.20 percent of GDP, industry by 7.3 percent or 32.03 percent of GDP, and the services sector by 6.9 percent or 41.47 of GDP, in addition to 7.5 percent from tariffs or 11.31 of GDP, Dr Sonexay said.

This year, the government initially forecast national GDP growth of at least 6.7 percent, with GDP per capita set to hit US$2,726 but now expects GDP to grow only 6.4 percent with US$2.677 per capita, he added. 

The main reason for the downgrade in growth is the impact of flooding, disease outbreaks, and the longer than usual dry season.

The agriculture, forestry and rural development sector is expected to achieve the target at 2.8 percent, 7.1 percent for industry 1.3 percent below the planned 8.3 percent, the services sector is expected to grow at 7 percent or 0.4 percent better than the projected 6.6 percent, while the customs sector is projected to reach the 7 percent target.

To ensure economic sustainability, the government requires active and transparent coordination between the various sectors and central and local administrations, particularly with regard to revenue collection, disaster prevention and financial management.

The roles and duties of some state organisations will be improved to ensure that responsibilities do not overlap and job descriptions are relevant.

In addition, the government has introduced measures to improve the business climate and attract knowledge-based business operators.