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Trade surplus likely this fiscal year on back of export surge
The government is aiming for a major trade surplus this fiscal year amid increases in the prices and quantities of commodity exports.
The National Socio-Economic Development Plan for 2011/2012, which came into effect this week, names an export value target of US$1.6 billion and an import target of US$1.4 billion, which would result in a trade surplus of about US$200 million.
The government's import and export plan for this year is based on the assumption that export volumes of major commodities such as copper and hydropower will increase, while the rising price of copper will boost export value.
The plan forecasts that the value of mining products will be about US$800 to US$900 million this fiscal year while the export value will be about US$241 million.
The Sepon mine in Savannakhet province has completed construction of its copper expansion project and hopes to boost exports from about 60,000 tonnes to 85,000 tonnes a year. The Nam Ngum 2 project, one of the largest hydropower plants in Laos, has already begun exporting electricity to Thailand.
The price of copper in the world market remains high at about US$9,000 per tonne, while the price of gold is about US$1,400 per ounce. The price of these commodities is expected to remain stable as the demand for raw materials increases in Asia, particularly in China.
The Asian Development Bank says in its latest economic projection that growth in China and other Asian countries will become a major driving force for Lao exports and economic growth, despite the financial crisis in the European Union. Laos's only exports to the EU and the US are garments and some agricultural products.
Bank officials and economists say Laos' import value will remain stable this fiscal year after seeing a major surge last fiscal year. The value of vehicle imports saw a more than 20 percent surge last fiscal year due to credit growth.
Commentators also say it is possible that credit growth in Laos will be low this fiscal year after surging in recent years. The Bank of the Lao PDR has already stopped issuing loans for public infrastructure development in a bid to curb inflation.
Public sector spending has been a major factor in the higher import value because most construction materials and vehicles are imported.
The export value reached about US$800 million in the first six months of last fiscal year while the import value rose to about US$1 billion. This resulted in a trade deficit of about US$200 million, according to a report from the Ministry of Planning and Investment.
vientiane times
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