Govt calls for bold actionto tackle economic woes

The government has called for central and local authorities to intensify action to realise economic strategies and measures aimed at addressing the ongoing economic hardship, amid concerns posed by global turbulence and internal economic pressures.

Prime Minister Sonexay Siphandone addresses the meeting.

The instruction was issued at the government’s monthly meeting in Vientiane, which ended on Friday.
Chaired by Prime Minister Sonexay Siphandone, the meeting stressed the need to meet the goals of the resolution adopted by the Party’s politburo in April to achieve greater economic independence and local ownership – a move that also aims to lessen dependence on imports and enhance resilience. 
Heavy dependence on imports is seen as a key factor in driving Laos’ consumer price index, a main gauge of inflation.
“The meeting calls for staying focused to address serious economic and financial issues, especially inflation, currency exchange rates, the price of goods, and foreign debt,” Minister and Head of the Administrative Office of the Prime Minister’s Office, Dr Buakhong Nammavong, told a press conference shortly after the meeting. 
In a separate meeting also held last week, the Governor of the Bank of the Lao PDR, the country’s central bank, Dr Bounleua Sinxayvoravong, told participants that inflation may continue to remain at two-digit figures until the end of 2024, above the target set to drag it down to just one digit by the end of this year. 
Inflation peaked in February last year, when it was recorded at 41.26 percent. Although the rate has dropped since then, it remains at two- digit figures and was posted at 24.92 percent last month.
Also tabled for discussion at the monthly cabinet meeting was the economic performance over almost the first half of 2024, according to Dr Buakhong.
Based on in-depth assessments, Laos’ economic growth is projected to dip slightly to 4.7 percent over the first six months of this year, down from the 4.8 percent forecasted for the same period last year, according to a report presented at the 8th Plenary Session of the 11th tenure Party Central Committee held in the middle of this month. 
The World Bank said in its report released on April 30 that economic instability, low worker skills, the out-migration of labour, and a challenging business environment contributed to the subdued economy. It said insufficient foreign exchange and the need to repay high external debts contribute to the kip depreciation and high inflation.
Attended by cabinet members in person and provincial governors via video link, the meeting called for the effective roll-out of all promulgated resolutions and measures issued by the Party and government to overcome the economic headwinds, Dr Buakhong said.
The government’s economic performance and the projection for the first half of the year and plans for the second half, along with fiscal and monetary performance and plans, are set to be debated at the upcoming 7th ordinary season of the National Assembly. 
Dr Buakhong said the meeting instructed the relevant sectors to prepare reports for general debate at the biannual session.
The meeting also recommended the need to strictly enforce measures to regulate mining projects, consider operating more domestic flights to tourist hotspots, and address social ills such as robbery and human trafficking.    
Concluding the meeting, the cabinet endorsed in principle a draft decree on fines for those violating the forestry law and relevant regulations, and a draft decree on private education. 

By Souksakhone Vaenkeo
 (Latest Update May 27, 2024)