The Lao government plans to borrow 263 million U.S. dollars to secure funds for projects in the 2013-2014 financial year, according to state-run daily Vientiane Times on Tuesday.
The announcement came during the prime ministerial decree on the implementation of the 2013-2014 socio-economic development plan.
During the 2013-2014 financial year, the Lao government plans to spend funds equivalent to 2.2 billion U.S. dollars. Revenue collection in the current financial year is expected to yield approximately 1.9 billion U.S. dollars and the sale of bonds to local and international investors will generate an additional 37.5 million U.S. dollars.
According to Vientiane Times, 225 million of the 263 million U. S. dollar budgetary deficit will be borrowed from international sources while the rest will be sourced locally. The remainder of funds will be provided by official development assistance from Laos'development partners.
The decree on the implementation of the 2013-2014 socio- economic plan states that 73.22 percent of state collected revenue will come from domestic sources including business, land and import export taxes as well as state enterprises and the sale of timber.
The largest area of expenditure for the 2013-2014 financial period will be state investment at 44 percent of the budget. State salaries will be the second largest at 19.33 percent followed by the payment of debt and administrative costs at 13 and 9 percent of the budget, respectively.
Financial observers are confident that the budget deficit level is still within an acceptable range and will not cause significant impact on the country's macroeconomic stability. A number of investment projects are expected to come to fruition in the next several years which will further solidify the national economic landscape.
Laos receives considerable support from the international community with approximately 777 million U.S. dollars in financial aid and technical support provided throughout the 2012-2013 financial year. Of that contribution, about 72 percent are grants while the remainder are low interest loans. The Lao government has invested the money on some 883 development projects throughout the country.