Laos' gross domestic product (GDP) growth for 2011 is projected to rise to 8.3 percent, according to a report released by the International Monetary Fund (IMF) this week.
In its latest World Economic Outlook, the IMF revised up its previous forecast of 7.5 percent Lao economic growth issued in April to 8.3 percent, without disclosing the exact reasons behind the rise, but the IMF country report for Laos released in August 2011 attributed the growth to continued expansion of the mining and hydropower sectors, increase of non-resource exports and tourism, and strong domestic demand.
The IMF's revised projection is higher than the Asian Development Bank's forecast of 8.1 percent growth, but lower than the World Bank's 8.6 percent.
According to the country report, Laos' export revenue from copper was projected to exceed 1.3 billion U.S. dollars in 2011, more than double the 2009 level, while gold export revenue was forecast to exceed 240 million U.S. dollars this year, a 50 percent increase from 2009.
Laos' electricity generating capacity doubled when the 1,080 mega-watt (MW) Nam Theun 2 hydropower project commenced operation in March 2010, while construction of the 1,800 MW Honsa Lignite thermal power plant is expected to provide a boost to activity during the construction stage (2010-2015) and will raise electricity exports in subsequent years.
The country report stated that even though real GDP growth remained robust, inflation was expected to average almost nine percent for 2011 as a whole, pushed up by increasing food and fuel prices.
It stated that boosting imports and putting pressure on the external position could make it harder to sustain the stabilized exchange rate regime with the attendant risk of a depreciation of the kip, raising the prices of imported goods and hence inflation.
The country report outlined the need to ensure that the country 's natural resource wealth would generate a sustained improvement in general living standards, including by achieving the Millennium Development Goals.
Other key objectives include reducing reliance on the mining sector, creating more balanced and more pro-poor growth, raising domestic food production and expanding road infrastructure to connect producers to markets in order to reduce shortages.