Lao PDR economic performance hascontinued to improve during 2006. Real GDP grew at 7.0percent in 2005 and is now expected to be slightly higher at7.3 percent in 2006. This growth is in large part due toforeign investment inflows in mining and hydro-power andgrowing mineral exports, but the share of non-miningcontributions has increased this year, reaching 4.9 out of7.3 percent. Agriculture, manufacturing and services sectorsare expected to sustain growth, due to rising FDI inagriculture, manufacturing, and increasing trend in services(especially tourism). Inflation (of Consumer Price Index)has continued to remain in single digits: after rising earlythis year it has dropped remarkably during the last fewmonths, to 5.5 percent in September and 3.7 percent inOctober 2006. This paper includes the following headings:introduction;part 1 recent economic developments -- themacroeconomic situation, elaboration and implementation ofthe Poverty Reduction Strategy; part 2 structural reforms --public expenditure policy and management, reform ofstate-owned enterprises, financial sector reform, tradereform, and private sector development; and part 3 donorassistance to the reform agenda -- public sector governance;reform of state owned enterprises & financial sector;trade reform; and private sector, tourism development, andland reform.
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