Lao economy to return to normal in 2020: Deputy PM

Lao Deputy Prime Minister and Minister of Finance Somdy Douangdy said Sunday that Laos' economy will return to normal in four years following a number of measures to increase revenue and curb deficit.

A detailed analysis of the current economic status makes it necessary to adjust downward the growth targets and adjust upward budget deficit, Somdy told the 2nd Ordinary Session of the National Assembly, according to a report by Lao News Agency.

"It is expected that next year will continue to witness a relatively high deficit of around 6.52 percent of GDP, and the fundamental cause of this is the planned expenditures approved by the government such as the increasing of salary index values, and allowances for students and village chiefs, among others. These are, however, necessary expenditures," Somdy said.

He said however that measures including increasing revenue collection and creating new revenue sources by issuing new taxes will gradually help the economy to return to normal.

He predicted that domestic revenues will gradually offset the expenditures, reducing deficit to around 2.51 percent of GDP in 2020.

The Ministry of Finance has proposed that the government consider other new sources of income to balance its deficit, such as external loans and the issuance of bonds.

Experts have also predicted that public debt will be reduced to 2-3 percent of national GDP. Endit