The central bank released its latest annual economic report recently, providing readers with data that reflects changes in the contributors of foreign exchange.
According to data cited in the bank’s 2018 report, electricity generation will likely become the main provider of foreign exchange in the foreseeable future, thanks to the industry’s rising export value.
In 2014 the sale of electricity to other countries amounted to only $570 million (Bt17.98 bIllIon). This figure surged to about $1 billion in 2016, rising further to $1.2 billion in 2017. Last year, the central bank initially projected the export value of electricity would reach $1.3 billion.
A number of electricity generation projects have begun commercial operation over the past year. More hydropower projects are currently under construction and are expected to export electricity in the near future.
The export of mineral products, gold and copper continues to maintain the top position among foreign exchange earners. However, the income earned from the export of these commodities has remained stable in recent years.
In 2014, mineral exports were valued at $1.2 billion, rising to about 1.4 billion in 2017 and last year. Copper exports were worth about $1 billion in 2014, rising to $1.1 billion in 2017.
The government is aware that the export value of mining products plays a significant role in contributing foreign currency to the economy. But it is recognised that these commodities will in time be depleted when the country’s mineral deposits are exhausted.
The central bank’s 2018 report also indicates that foreign exchange generated by the garment industry and tourism has declined.
The export value of garment products was $391 million in 2014. This figure dropped to $351 million in 2015, to $249 million in 2016, and sank further to $178 million in 2017.
The Bank of the Lao PDR forecasted that last year the export value of Lao garment products would improve slightly to $189 million, but this figure is only a projection.
Over the past decade, the garment industry was considered to be one of the top foreign exchange earners.
With regard to tourism, the central bank data shows that this industry was also a top foreign exchange earner but over the past few years income from this source has also declined.
According to data from the Ministry of Information, Culture and Tourism cited by the bank in its 2018 annual report, the amount of revenue generated by tourism began to decline after 2015. That year, the tourism industry generated about $724 million, dropping to $716 million in 2016 and to $648 million in 2017. The bank made an initial projection that last year tourism would generate $780 million.