The World Bank has raised its GDP growth forecast for Laos this year,expressing optimism that agricultural output will rebound. The bank announced the revision of its earlier projection of 7.5percent growth to 8.3 percent during a video conference yesterday from Tokyo, Japan, when unveiling the East Asia Economic Update mid-year review.... the main driver of Lao GDP growth in 2012 will be the mining sector...Construction will also play an im portant role in driving economic growth....The services sector is also expected to see remarkable growth this year. The sector will benefit from higher wholesale and trade volumes,and growth in tourism, transport and telecommunicationsUndoubtly mining is still growing and revenues are as high as expectations for higher salaries within the mining companies. The latter isn't to bad for local consumption, so let's see how far the unions will go (just avoid the same wild strikes as they happen in Vietnam and Cambodia. They start tio scare away investors). What about construction? What I see so far the construction sector may not bring the money the world bankers expect. Most workers are from Vietnam or China anyway, same goes for construction material - only Lao Cement seems to be the one who has the biggest advantage. And again: Who will move in into all these shopping centers, and who will buy? A quick look to Vietnam shows that only crescent in Saigon seems to do well. Telecommunicatons: While the number one Lao Telecom is still not really profitable, Beeline just announced to pull out of Cambodia, and only Unitel made a lot of money recently. The question is, how much more they can grow (or simpler: Whan will every Lao has a phone or two?) Tourism: For now, the numbers are Fata Morganas. Means, it is real, but also unreal. Yes, numbers are increasing, but mainly from neighboring countries. It is still not clear, how much money comes from a Thai organized day tour. At least, more wealthly Thais still like Luang Prabang, and Chinese are starting to travel on a premium level as well. But Laos still lacks of infrastructure to grow significantly, and the extension of the airport will not make a change, unless the market will be more open to other airlines. By the way: This is just my opinion and analysis; If you think I am totally wrong, please let me know why.
Wednesday, May 23, 2012
GDP growth based on mining, telcos and service sector
Posted by thomas at 9:31 PM