Laos not immune to global economic crisis: WB hinh anh 1A corner of Vientiane (Photo: VNA)
 
Vientiane (VNA) - Laos’ economic growth is projected to decline in 2020 due to the impact of the COVID-19 pandemic and measures to contain its spread, unveiled a World Bank report on the country’s growth and debt in the year.

The pandemic will have a significant impact on various sectors of Laos, particularly tourism, trade, investment and remittances, it said. 

Lao economic growth is projected to decline to 1 percent in the baseline scenario and negative 1.8 percent in a worse-case scenario. 

The economic downturn has particularly affected the service sector. A sharp drop in the performance of the travel, tourism and hospitality sectors – which account for 11 percent of total employment and 22 percent of employment in urban areas – has caused widespread job losses. 

Between 96,000 and 214,000 additional people are estimated to fall into poverty as a result of the pandemic.

The impact of the COVID-19 is also projected to increase the fiscal deficit in 2020 to between 7.5 and 8.8 percent of GDP, from 5.1 percent in 2019.

Consequently, debt levels are expected to increase to between 65 and 68 percent of GDP in 2020, from 59 percent of GDP in 2019. Reserve buffers are expected to fall in 2020 and cover less than one month of imports.

The report also includes a thematic section on Building Resilient Health Systems. Evidence shows that Laos needs to invest more in building a resilient health system to effectively respond to health emergencies. 

At the same time, it is important to ensure that adequate resources continue to be available to provide quality essential health services to all citizens./.

VNA