Lao PDR's real Gross DomesticProduct (GDP) growth will remain robust in 2011 withprojected growth of 8.6 percent compared to 8.4 percent in2010. Natural resources and manufacturing sectors areexpected to drive growth this year. The expected growth inthe garment exports (by about 15-20 percent in this year)follows the European Union (EU) relaxation in raw materialsourcing requirement and increased orders by key garmentproducers. The service sector also shows signs ofimprovement, particularly in transport, tourism (hotels andrestaurants) and retail trading. Agriculture (fishery,livestock and crops) is expected to benefit from the recentincrease in regional demand and higher food prices. Out of8.6 percent growth in 2011, about 3.6 percentage points comefrom the resource sectors, about 1 percentage point eachfrom manufacturing and agriculture, 0.5 percentage pointsfrom construction and 2.5 percentage points from services.Although overall trade balance is expected to improve thecurrent account deficit is expected to widen slightly tooabout 9.4 percent of GDP in 2011 from about 8.6 percent in2010 mainly on the account of larger transfers of profitsand debt service payments abroad by large resource projects.Thus, resource current account surplus is expected todecrease to 4.8 percent of GDP in this year from about 5.5percent in 2010.
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