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Laos faces major trade deficit
Laos is facing a trade deficit of US$211 million as the value of imports has increased over the past six months of this fiscal year, according to a report from the Ministry of Planning and Investment.
The ministry delivered the report to a joint meeting of the planning and finance sectors at Lao ITECC in Vientiane on Wednesday. The first two quarters of the 2010/2011 national socio-economic development plan were reviewed.
According to the report, over the first six months of the current fiscal year, Laos imported goods worth about US$1.047 billion but exports were worth only about US$836 million, resulting in a deficit of about US$211 million.
The value of imports amounted to 83 percent of the annual plan and was up by 48 percent compared to the same period last year. Goods imported for investment projects accounted for 28 percent of the total import value while the rest were consumer goods.
The value of consumer goods including fuel, gas, vehicles and spare parts saw an 85 percent increase compared to the same period last year. Imported foods saw 40 percent growth compared to last year.
The import value of electrical equipment saw a 2.92 percent increase compared to the same period last year, while the import value of construction materials saw a 19 percent increase.
The export value reached 68 percent of the annual plan, and saw a 15 percent increase compared to the same period last year with the export value of mining products being the main driving force, covering 54 percent of the total export value.
Copper exports saw a 2.08 percent increase, covering 28 percent of the total export value. Industrial goods accounted for 15 percent of total exports with textile products accounting for 8.99 percent. Agricultural products accounted for 7 percent, electricity 2.08 percent and timber products 1.49 perce nt.
The trade deficit has caused a decrease in the foreign reserve fund. According to the report, the foreign reserve fund rose from US$584 million in November to US$732 million in January before falling to US$674 million in February.
The government aims to keep sufficient foreign reserves to secure imports for about six months, and ensure stability of the kip. Currency exchange fluctuations are kept to within a range of five percent.
The value of the kip increased 3.8 percent against the US dollar and decreased 3.71 percent against the Thai baht.
The main reason for the drop in value of the kip versus the baht is the increase in the amount of Thai goods, particularly construction materials and vehicles, entering Laos.
vientiane times
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