Laos economy to grow 8.2 per cent, despite floods

Nov 30, 2011, 7:34 GMT

Vientiane - The Lao economy is expected to have grown 8.2 per cent in 2011, despite the negative impact of devastating floods this monsoon season, the National Economic Research Institute (NERI) said Wednesday.

'The floods will certainly have an adverse impact on growth but not to the extent that the World Bank forecasts,' NERI Director General Liber Libuapao told the Vientiane Times.

The World Bank recently cut its gross domestic growth forecast for Laos this year from 8.6 per cent to 8 per cent in the wake of severe flooding caused by two major typhoons, Nock-Ten and Haima.

The bank also forecast GDP growth of 7.5 percent growth next year, lower than the government's target of 8 percent.

But Liber argued that while agriculture was a major economic base, it was no longer the main driving force of economic growth, as it has been superseded by the industry and service sectors.

According to the Ministry of Planning and Investment, the industry sector grew 19 per cent in the first half of this fiscal year, accounting for 27.6 per cent of GDP, while the service sector grew 6.3 per cent growth, accounting for 38.7 per cent of GDP.

Liber said that while the floods had had only a minor impact on GDP growth, the population as a whole had suffered as the agriculture sector employs large numbers of people. About 78 per cent of Laos' population of 6.5 million people now work in agriculture.