VIENTIANE, Sept. 16 (Xinhua) -- The Lao Academy of Social and Economic Science (LASES) has lowered its forecast of the Southeast Asian country's economic growth to 3 percent for 2022, from 4 percent projected earlier.
The downgraded projection of the country's economic growth is due to slower expansion in sectors relating to consumption, export, and private and state investment, according to the academy's report on Thursday.
The value of foreign direct investment fell to 280 million U.S. dollars over the past six months of 2022, a drop of 51 percent compared to the same period of 2021, according to the report.
In addition, state investment dropped by 4.1 percent over the past six months and is predicted to continue to decrease. The falling value of state investment is due to Laos' economic and financial difficulties and rising debt-service payment, the report said.
Even though exports grew over the past six months, the growth was slower than imports.
Internal and external factors impacted on the growth of the economy this year, including the COVID-19 pandemic, global economic recession, and high inflation.
The depreciation of the Lao kip is among the main factors affecting economic growth and inflation in Laos, and is a challenge to businesses wanting to expand their operations.
In August, the year-on-year inflation rate jumped to 30.01 percent, the highest figure recorded in more than two decades, according to the Lao Statistics Bureau.
Flooding was another problem hindering economic growth, with widespread floods hitting several provinces recently.
While Laos has a huge opportunity to boost commercial production, increase exports, and benefit from the China-Laos railway and tourism, the sectors concerned need to do more to turn Laos into a regional hub and capitalize on the potential provided by the railway, according to the report.