The Lao government experienced a budget deficit of more than 2,800 billion kip, or around $294 million, for the just-ended fiscal year of 2006-07, because of shortfalls in revenues.
Laos' Finance Ministry says government expenses for the last fiscal year exceed 8,800 billion kip, while revenues total a little more than 6,000 billion kip, forcing the government to borrow from foreign creditors to cover the deficit.
Lao authorities say they expect a better fiscal performance for the current year because of projected higher economic growth rate. Officials say they expect the economy to grow at an average rate of 8%, which will bring up the per capita income to around $720.
To achieve this goal, Laos has to attract more foreign investments.
Authorities say they are optimistic because of their improved ranking on the World Bank's list of most attractive nations for investment. Laos now ranks 101 out of 145 countries, compared to 144 in 2005.
Laos' number one foreign investor for 2006 was China, who has invested more than $1,129 million in its southern neighbor since 2001, mainly in hydro-power, mining, and agricultural sectors.
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