The Lao economy is expected to expand moderately in 2024 and 2025, thanks to external demand linked with tourism and trade, according to a new Asian Development Bank (ADB) report.
Lao economy forecast to grow 4% in 2024, 2025. (Photo: https:adb.org)
ADB's flagship publication Asian Development Outlook (ADO) April 2024 forecasts Laos's gross domestic product (GDP) will grow 4% in both 2024 and 2025. External demand will support growth in services, with international tourist arrivals projected to increase to 4.2 million in 2024 thanks to improved infrastructure connectivity. Foreign investment in renewable energy will help drive moderate industrial growth.
ADB Country Director for Laos Sonomi Tanaka said that pressure from unsustainable debt and high inflation has persisted, dampening the country’s overall pace of economic recovery.
Inflationary pressures in the country are expected to remain as businesses increase prices to cover higher costs due to the falling value of the currency and wage increases. Consumer prices are projected to rise an average 20% in 2024 before moderating to 7% in 2025.
ADB cited that rising inflation caused the price of food, hotel services and restaurants to increase above the income of workers, thereby reducing the purchasing power of most Lao people./.
VNA
