VIENTIANE, Sept. 21 (Xinhua) -- The Asian Development Bank (ADB) has lowered its 2022 economic growth outlook for Laos to 2.5 percent from 3.4 percent projected in April and to 3.5 percent from 3.7 percent for 2023.
The slower growth projection is linked to supply disruptions and rising commodity prices which have increased inflationary pressures, according to an updated report released on Wednesday from the ADB website.
The downgraded economic growth forecast comes amid sluggish global demand and the tightening of monetary policy to manage inflation.
Most businesses returned to normal operations in the first half of the year, and international tourist arrivals have begun to pick up.
However, volatile prices, particularly for oil, have increased the cost of living, resulting in a softening of domestic consumption. Sharp increases in the price of fertilizer, animal feed, food, and fuel discouraged activity in agriculture and manufacturing. These trends delayed economic recovery, said the ADB.
Rising prices are threating the welfare of households in Laos, particularly poor households, entailing risks to food and nutrition security for families. This is creating challenges not only for the people, but also for public finances, according to the bank.