Business News

7.7-per-cent growth forecast for communist Laos

Apr 7, 2011, 4:44 GMT

Vientiane - The Asian Development Bank forecast Lao economic growth this year at 7.7 per cent, compared with the government's projection of 8 per cent and the World Bank's 8.6 per cent, state media reports said Thursday.

According to the bank's latest country report, Laos' economic growth this year would be driven by a 25-per-cent surge in exports, thanks to high copper and gold prices on the world market and rising exports of hydropower, the Vientiane Times reported.

Last year, Laos' economy grew 7.5 per cent, the bank said.

Laos' output of electricity increased by 140 per cent last year after the World Bank-backed Nam Theun 2 hydroelectric plant in central Laos started production. Mining, primarily of cooper and gold, rose 19 per cent in 2010 as a result of expanded operations.

On a negative note, however, bank deputy country director Barent Frielink warned that Laos faces rising inflation this year.

'Even though Laos' economy is projected to grow steadily, inflation is still a challenge which requires proper measures and policies to keep it under control,' Frielink said.

The bank projected inflation at 6.5 per cent for 2011 because of higher fuel and food prices.

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