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Laos eyes higher GDP growth
Publication Date : 24-10-2012
Vientiane is projecting a 12.6 per cent economic growth during this fiscal year with GDP (gross domestic product) forecast at 24.5 trillion kip (US$3.65 billion), but the administration needs to invest around 10 trillion kip through state projects to meet the target.
The plan was presented at the annual Vientiane administration meeting yesterday to review the implementation of last fiscal year's plan and discuss the plan for the 2012-2013 fiscal year. Vientiane Mayor Soukanh Mahalath chaired the meeting.
“To reach the target, the Vientiane administration needs to invest around 41 per cent of GDP or around 10 trillion kip,” a report released at the meeting stated.
GDP growth of 12.4 to 12.5 per cent was planned for last fiscal year, but only 12.2 per cent growth was achieved.
Despite the growth in industrial production such as the garment industry, tourism and transportation, growth in the agriculture sector did not meet expectations. This included a 17,000 tonnes fall in rice yields, low ering GDP growth as a whole.
With the administration targeting economic growth of 12.6 per cent this fiscal year, it will strengthen growth in agriculture to 9 per cent, responsible for 20 per cent of GDP. Growth of 17 per cent for industry comprising 42 per cent of GDP is expected, and 10 per cent growth is targeted for services, which will make up 38 per cent of GDP.
To meet the planned targets, the administration needs to invest around 10 trillion kip, but it will receive only 117 billion kip from the state budget, so the city has to obtain the balance from domestic and foreign investors, and bank loans.
Following the guidance of the ministry of planning and investment as well as the government, investment in Vientiane will focus on rural development and poverty reduction, support commercial production that brings real benefits to people, such as agricultural product processing, building development villages in border areas, and a natural disaster response programme.
In this regard, the Vientiane administration plans to invest 30 per cent of the budget and official development funds in the economic sector, 35 per cent in social programmes, 17 per cent in education, and 9 per cent in healthcare.
Another 35 per cent of the budget will be allocated for road and office construction, of which 28 per cent will go towards road building and 7 per cent to the building of offices.
At the meeting, Soukanh called on all officials to find solutions for effective implementation of the plan, as there is not much time left before Laos is expected to achieve the Millennium Development Goals and reduce poverty in 2015.