2. Construction Industry
a) GDP growth 3
Economic growth will remain rapid in the forecast period from 2013 – 2014,
averaging 8.1% a year. Despite weaknesses in the global economy, GDP growth
in Laos will continue to be supported by its main trading partners in the region,
most notably China. The development of several power projects will also help to
keep economic growth healthy in 2013-14.
High global prices for minerals have created strong foreign interest in Lao’s
mining sector. Many of largest global mining companies are already operating in
the country and looking to expand production there. Such is the level of interest in
the mining industry that parliament has put pressure on the government to slow
down the rate of approving new concessions; as the legislature lacked the
capacity to monitor them properly.
The construction of the Laos-China railway should boost economic growth, but
the extensive use of Chinese engineers and workers on the project will mean that
the main benefit to Laos would only be the time taken to transport goods. This will
be reduced in the long term when it is completed. Severe flooding in 2011 hit
agricultural output in that year, but improvements in productivity should continue
to occur in 2013-14 (weather permitting) as large areas of farmland are leased to
foreign investors. The outlook for services is partly dependent on the health of
other economies in the region, given that the majority of tourists visiting Laos
come from South-east Asia. A decline in the price of copper in 2013 would have
an adverse impact on Laos’s rate of export growth, but development of the
hydropower sector will increase the diversity of the export base