Vientiane (VNA) – The World Bank (WB) has lowered Lao economic growth in 2022 to2.5% from the earlier 3.8% projection in April, reported Vientiane Times.

In East Asia and Pacific October 2022 Economic Update, the bank also forecasts that Laos' gross domestic product (GDP) growth in 2023 will be 3.8%.
 
According to the WB, economic performance across developing East Asiaand the Pacific, including Laos, could be compromised by slowing global demand,rising debt, and a reliance on short-term economic fixes to cushion againstfood and fuel price increases.

Growth in developing East Asia and the Pacific outside of China is forecast toaccelerate to 5.3% in 2022 from 2.6% in 2021.

China, which previously led recovery in the region, is projected to grow by2.8% in 2022, a sharp deceleration from 8.1% in 2021, the report said.

For the region as a whole, growth is projected to slow to 3.2% this year from7.2% in 2021, before accelerating to 4.6 percent next year, it added.

The report also noted that Laos, Mongolia and Myanmar have faced moresignificant exchange rate and inflation pressures than the rest of theregion. Laos and Mongolia are most vulnerable in these respects becausethey were already struggling with high debt.

In Laos, the weakening exchange rate is contributing to inflation, ramping uppressure on low-income families and hindering their chances to rise abovepoverty.

The global economic slowdown is beginning to dampen demand for exports ofcommodities and manufactured goods in the region.

According to the World Bank, as countries in the region seek to shieldhouseholds and firms from higher food and energy prices, current policymeasures provide much-needed relief, but add to existing policy distortions.

Controls on food prices and energy subsidies benefit the wealthy and drawgovernment spending away from infrastructure, health and education, it said./.