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Laos sees economic recovery but challenges remain: WB

The Lao economy is witnessing a gradual recovery from the COVID-19 pandemic, with GDP growth predicted to reach 3.7% this year, up from 2.7% in 2022, according to the latest World Bank economic update issued on November 30.
Laos sees economic recovery but challenges remain: WB ảnh 1A market in Vientiane. (Photo: VNA)
Vientiane (VNA) - The Lao economy is witnessing a gradual recoveryfrom the COVID-19 pandemic, with GDP growth predicted to reach 3.7% this year,up from 2.7% in 2022, according to the latest World Bank economic update issuedon November 30.

The report, titled Fiscal Policy forStability, projects that the Lao economy will grow at 4.1% in 2024, butchallenges will remain due to skyrocketing inflation, high external debts and alabour shortage.

The economic improvement is largely due tostronger performance in tourism, transport and logistics services, andgreater foreign investment, but the growth rate is lower than was previouslyexpected, according to the WB.

The report shows inflation has increasedconsumption and business costs, thereby reducing household spending on food,education and health. Inflation has also depleted savings, placing manyfamilies at risk of falling into poverty.

The government has taken several steps toimprove its finances by controlling expenditure and increasing domesticrevenues in the first half of 2023.

Economic growth is projected to accelerateto an average of 4.2% in the medium term, led by services and exports andassisted by growing international demand, coupled with Laos’s improvingconnectivity and logistics services.

However, the country's currency Kip is likely to remain underpressure because of high imports and the high demand for foreign currencies torepay debts./.

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