In Vientiane, Laos (Photo: Reuters)
Vientiane (VNA) - An elevated fiscaldeficit will result in growing public debt, which will ramp up pressure on Laos' debt servicing capacity amid the COVID-19 crisis, theVientiane Times reported on August 21.
The Lao Government has estimated that the budget deficit willrise from 6.69 trillion kip (700 million USD) , equal to 3.7 percent of the country’s grossdomestic product (GDP), to 10.3 trillion kip (1.1 billion USD), or 5.7 percent of the GDP.
Chairman of the Lao National Assembly’s Planning, Finance andAudit Committee, Dr Leeber Leebouapao told the paper that the government isseeking ways to address the country’s debt following a revenue shortfall.
The government may attempt to issue bonds to mobilise morefunds or borrow more money from various sources to repay debts and address theprojected budget deficit, he said.
The World Bank (WB) also stated that public debt is expected torise to around 65 percent to 68 percent of GDP in 2020, leaving Laos at highrisk of debt distress.
In June, Prime Minister Thongloun Sisoulith told the NationalAssembly that the government will issue bonds for the rest of this year torepay debts.
Economists have recommended the government to assist theprivate sector, notably small and medium-sized enterprises to lower theirproduction costs in order to boost productivity for exports./.
