From land-locked to ‘land-linked’, Laos is the diamond in the rough that will surpass everyone’s expectations within the next few years.
The economy of the Lao People’s Democratic Republic (Lao PDR) continues to grow vigorously. However, because it is a resource-rich country with an economy heavily reliant on mining and hydropower, the government of the day realizes that more focus on diversifying the economy is needed. The government has plans to strive for strong macroeconomic management, a sound fiscal framework, and effective budget management. While the government has consolidated expenditures to contain the deficit, it needs to increase fiscal and foreign reserves to absorb any future shocks.
The Asian Development Bank based in Manila has identified the needs of the Lao PDR as consistent with the rapidly evolving development needs of a lower-middle-income country.
Under its national socioeconomic development plans, the government has adopted a policy to transform the Lao PDR from a landlocked to a ‘landlinked’ country, and is aiming to be eligible to graduate from Least Developed Country status by 2020.
Having decelerated since 2013, growth in Laos is projected to pick up over the next 2 years. In 2015, it achieved one of the highest GDP growths among ASEAN countries at almost 7% and this is set to continue over the next few years as the country transforms itself. Inflation has ebbed to its lowest in 6 years and is forecast to remain modest. Lower global oil prices have helped to bolster a fragile external position.
“In 2015, Laos achieved one of the highest GDP growths among ASEAN countries at almost 7% and this is set to continue over the next few years as the country transforms itself.”