VIENTIANE, May 3 (Xinhua) -- The mining sector's contribution to the Lao economy will continue to drop over the coming years as a lower output is forecast for this natural resource-based business, according to an update from the Lao National Economic Research Institute.
The institute released its domestic economic update last month, which highlighted projections for 2018 and beyond, local daily Vientiane Times reported Thursday.
According to the report, the output of the mining sector, one of the main contributing sectors to the economy, has witnessed continued decline. This has deflated the sector's contribution to the economy.
The institute did not list the factors contributing to the lower productivity of the mining sector. However, it is widely understood that the mining sector, particularly two major mining operations in Laos, has seen a fall in the production of raw materials. Even, the Sepon mine is expected to close in 2020 due to the exhaustion of resources.
Despite the mining sector's lower contribution to the economy, economists at the institute expressed confidence that the country's overall economic growth would range between 6.5 percent and 7 percent in 2018, one of the highest rates in the region.
They said the main driving force for the Lao economy will be electricity generation, adding that a number of hydropower facilities have kicked off commercial operations. They include the Hongsa lignite, Nam Ou 2 and 5, Xekaman 1 and Nam Mang 1.
In addition to hydropower, construction will play a key role in securing the strong growth of the economy, according to the economists. They cited the construction of the Laos-China railway as a key driver of this sector's development.
Apart from this, the services sector, particularly retail sales, will make a significant contribution to the economy, the economists said.
International banks such as the World Bank and Asian Development Bank recently released their economic projections, and their reports were in line with the projections of the institute.
