Lao PDR Economic Monitor, November 2006

Lao PDR economic performance has
continued to improve during 2006. Real GDP grew at 7.0
percent in 2005 and is now expected to be slightly higher at
7.3 percent in 2006. This growth is in large part due to
foreign investment inflows in mining and hydro-power and
growing mineral exports, but the share of non-mining
contributions has increased this year, reaching 4.9 out of
7.3 percent. Agriculture, manufacturing and services sectors
are expected to sustain growth, due to rising FDI in
agriculture, manufacturing, and increasing trend in services
(especially tourism). Inflation (of Consumer Price Index)
has continued to remain in single digits: after rising early
this year it has dropped remarkably during the last few
months, to 5.5 percent in September and 3.7 percent in
October 2006. This paper includes the following headings:
introduction; part 1 recent economic developments -- the
macroeconomic situation, elaboration and implementation of
the Poverty Reduction Strategy; part 2 structural reforms --
public expenditure policy and management, reform of
state-owned enterprises, financial sector reform, trade
reform, and private sector development; and part 3 donor
assistance to the reform agenda -- public sector governance;
reform of state owned enterprises & financial sector;
trade reform; and private sector, tourism development, and
land reform.