Laos maintains high growth rate, a challenge: ADB
(KPL) Laos' s economic is expected to expand by between 7.8 and 8 per cent in this year, as resource-based industries, manufacturing and services continue to generate robust growth, said a key Asian Development Bank report in Vientiane yesterday.
Weak global demand will weigh on developing Asia in 2012 but growth rates in most economies remain robust and should tick back up in 2013 with private consumption providing support, according to ADB’s flagship annual economic publication, Asian Development Outlook 2012.
Across the region, East Asia will see a deceleration in growth to 7.4 per cent this year from 8 per cent in 2011, weighed down by weaker exports and investment.
China , the world’s second largest economy, will lead the way with growth set to moderate to 8.5 and 8.7 per cent for 2012 and 2013, down from 9.2 per cent in last year.
In contrast, Southeast Asia will see growth quicken, with GDP expanding to 5.2 per cent in 2012 from just 4.6 per cent in 2011, on the back of the continued recovery in the Thai economic.
In Laos, inflation is forecast to moderate to around 6.7 per cent in 2012. Lower global food prices will ease the pressures on food, which has a large share in the consumer price index.
Given the volatility of fuel prices in the world market, increased inflation continues to be a threat.
In 2011, the services sector grew by 7.9 per cent as tourist arrivals went up by 9 per cent to 2.7 million which helped support the hotels and restaurant business as well as the transport sector.
The roll out of third generation mobile phone and internet services contributed to growth of telecommunications while banking services continued to expand.
In addition, manufacturing sector growth contributed significant portion to overall economic growth.
One of the major highlights was garment sector which benefited from European Union’s relaxation of rule of origin for import of garments.
Rapid growth in the Asia region is leaving millions behind, causing a widening gap between rich and poor that threatens to undermine the region’s stability.
Another 204 million people could have been lifted out of poverty over the past 20 years if inequality had remained stable instead of increasing as it has since the 1990s.
Inequality heads to a vicious circle, with unequal opportunities creating income disparities, that in turn lead to dramatic differences in future opportunities for families. Rising inequality can eventually undermine the growth potential of a country.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.