A market in Vientiane. (Photo: VNA) The report, titled Fiscal Policy for Stability, projects that the Lao economy will grow at 4.1% in 2024, but challenges will remain due to skyrocketing inflation, high external debts and a labour shortage.
The economic improvement is largely due to stronger performance in tourism, transport and logistics services, and greater foreign investment, but the growth rate is lower than was previously expected, according to the WB.
The report shows inflation has increased consumption and business costs, thereby reducing household spending on food, education and health. Inflation has also depleted savings, placing many families at risk of falling into poverty.
The government has taken several steps to improve its finances by controlling expenditure and increasing domestic revenues in the first half of 2023.
Economic growth is projected to accelerate to an average of 4.2% in the medium term, led by services and exports and assisted by growing international demand, coupled with Laos’s improving connectivity and logistics services.
However, the country's currency Kip is likely to remain under pressure because of high imports and the high demand for foreign currencies to repay debts./.
VNA
