VIENTIANE, April 4 (Xinhua) -- The economic growth in Laos is expected to remain stable in 2019 and 2020, supported by expanding agriculture, energy, industry and services sectors, a latest Asian Development Bank (ADB) report said.
The Asian Development Outlook (ADO) 2019 forecasts Laos' gross domestic product (GDP) growth to remain at 6.5 percent in both 2019 and 2020, according to local daily Vientiane Times reported on Thursday.
Industrial growth is forecast to edge up slightly to 8.1 percent in 2019 from 8.0 percent in 2018, largely because of sustained infrastructure development and increase in electricity generation.
The agricultural sector is expected to expand by 2.5 percent in 2019 and 2020 and the services sector is expected to grow by 6.7 percent, because of the government's efforts in 2019 to attract tourists from China and neighbouring countries.
Laos' economic growth will remain steady because of the recovery in agricultural production and strong growth in electricity generation, construction and tourism related services, ADB Country Director to Laos, Yasushi Negishi said.
"To maintain macroeconomic stability and achieve inclusive and sustainable growth, the government should further reduce public debt as well as improve public finance management in areas such as revenue collection, debt management and reductions in fiscal deficits in the coming years," he said.
Inflation is forecast to remain at 2.0 percent in both 2019 and 2020 as global oil prices are expected to be lower than 2018 and food prices to remain subdued due to the recovery in agricultural production.
The current account deficit is expected to widen to 9.5 percent of GDP in 2019 and 10 percent in 2020. Electricity exports will edge up this year, because of new generating capacity, which will help push up the volume of the country's exports by 12 percent in U.S. dollar terms both in 2019 and 2020.
Meanwhile, import growth will accelerate by 13 percent this year and 12 percent in 2020 to support the construction of hydropower projects, expressways and the railway.
International reserves are forecast to fall to just under one billion U.S dollars in 2019, which will cover 1.3 months of imports.
Risks remain, including an uncertain global trading environment, while the potential worsening of the country's fragile external payments position is a major domestic risk as well as the threat of natural disasters, the ADB's flagship economic publication said.