Service sector shared 39.5% of GDP last year

(KPL) Laos’ gross domestic product last year saw a growth of only 7 percent, amounting to 108,605 billion kip (USD 13.27 billion) that was lower than the expected 7.5 percent, as a consequence of the global economic turndown, a decrease in copper prices and climate change.

The Minister of Planning and Investment, Mr Souphanh Keomixay, made a statement at the third Ordinary Session of the National Assembly’s (NA) Eighth Legislature on April 25.

GDP growth was driven by agriculture, industry, and service sectors and domestic production excise tax and import tax. All of them saw an increase; agriculture rose by 2.8 percent covering by 23.2 percent of the GDP, industry increased by 10.5 percent covering 29.1 percent of the GDP, service rose by 7.4 percent representing 59.5% of the GDP and domestic production excise tax and import tax increased by 5.3 percent representing 8.3 percent.

The overall GDP growth enabled the country to maintain political stability, security and social order. A decrease in petrol prices was a positive factor for low-cost logistics and low-capital production. The decrease in copper prices might have had worse implications on trade balance and the country’s failed collection of state revenue, Mr Souphanh said.

In addition, the country faced climate change and natural disasters. Parts of the country were hit by insects such as locusts, destroying rice fields in Northern provinces. This and other disasters led to a fluctuation in goods prices, failure of state revenue collection and other negative phenomena. These factors led to the lower than expected GPD growth of only 7 percent last year.

The main sectors contributing to the GDP growth were industry at about 3 percent, followed by service at about 2.9 percent and agriculture representing 0.7 percent. The GDP per capita was USD 2,025, and GNI reached USD 1,601.

The inflation ratio last year stood at 1.35 percent, showing a decrease of 0.33 percent compared to that of the previous year.