IMF expects Lao economy to expand 6.8 percent in 2017

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VIENTIANE, Feb. 28 (Xinhua) -- The International Monetary Fund (IMF) has predicted that Laos' gross domestic product (GDP) will grow at 6.8 percent in 2017, less than the government's projected rate of 7 percent.

The IMF concluded a consultation with Laos in mid-February, describing Laos' challenges in dealing with the current account deficit, falling foreign currency reserves, and growing public debt.

Lao economists noted that the economy had been impacted by the anemic recovery of the global economy, which drove down the prices of mining products, reported Lao state-run media Vientiane Times on Tuesday.

As growth continues to moderate in the near term, inflation is projected to remain in low single digit, aided by a strengthening Lao currency kip exchange rate.

Nonetheless the IMF commended Lao authorities for their strong macroeconomic performance and progress on poverty reduction despite economic challenges, said the report.

It noted that there are significant vulnerabilities in the external, fiscal, and financial sectors, and that risks to the outlook could materialize from a regional growth slowdown, tightening in global monetary conditions, and capital flow volatility.

The IMF recommended Lao authorities continue allowing the exchange rate to move gradually within the official band, supported by the tightening of kip liquidity, to help accumulate gross international reserves and reduce external vulnerabilities.