World Bank's half-year report on East Asian economies.

The World Bank Half -Yearly Report says that Laos' economy is projected to grow at 7.3 percent in 2005 and to continue growing steadily at 7 percent in 2006. A large part of this growth comes from increased foreign investment flows in hydropower and mining: without increased investment and exports in these sectors real growth would have been about 4.2 percent in 2003. 6 percent in 2004, and projected at 4.8 percent in 2005 and 2006.

Therefore, promising growth in sectors other then mining and hydropower is increasingly important for ensuring stable growth in the long-run.

Real growth in Lao PDR reached 6.4 percent in 2004, up from 5.8 in 2003. Agriculture recovered from 2003, growing at above 3 percent in 2004 and 2005(projected), in comparison to 1.8 in 2003; this increase came mainly from recovery in crops after a drought. Manufacturing picked up on the back of strong domestic demand. Private investment and exports performed better too.

Rapid growth in the neighboring countries and increasing foreign investment and trade provide a base for keepng this performance in the future.

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