Macroeconomics Lack Strong Foundation, Prime Minister says
Briefing the 2nd Ordinary Session of the National Assembly on Monday, Prime Minister Thongloun Sisoulith said that the national macroeconomic foundation was not strong enough and several risks have been identified, especially those related to the state budget and foreign exchange balancing budget.
PM Thongloun noted in his ten-page report on the implementation of the National Socio-Economic Development Plan, the State Budget Plan, and Currency Plan as well as targets for months to come that the financial and monetary tools necessary to ensure that the market-oriented management of cash flow are limited. Meanwhile, the implementation of the financial and monetary policies is not as effective as required.
The state budget still lacks liquidity and faces a deficit with the collection of revenue failing to meet targets and the collection of revenue and budget spending still face problems of corruption, the management of the state budget spending is not being conducted in a thrifty and effective manner, the accumulative public debt remains huge in number and unresolved, and the violation of planning and monetary rules is yet to be decisively stopped.
Most state enterprises lack business liquidity and need diligent reforms. Private businesses seem to be apathetic due to lack of financial liquidity, and most banking institutes are filled with short-term deposits. As a result, they cannot respond to the demands of national development and access to financial sources remains a challenge for small and medium enterprises. The capital market is yet to be effective.
The report by the prime minister also suggests that the development of education in rural areas remains a challenge as inadequate school operating budgets have been identified as a problem along with a lack of libraries, laboratories and textbooks, poor teaching quality as well as challenges in the development of health services and labour skills.
PM Thongloun proposed that the National Assembly approve an adjusted socio-economic development plan designed to achieve an annual economic growth rate of 7-7.5 per cent for the next four years.
The proposed development plan urges annum economic growth to be 7 per cent for both 2017 and 2018, and 7.3 and 7.5 per cent for 2019 and 2020, respectively.