Laos' Cabinet has proposed a budget increase of more than 12% for the next fiscal year, with a total amount of 9,951 billion kips, to cover planned salary hike for all government employees.
Addressing the on-going 5th ordinary session of the 6th Legislature last week, Minister of Finance Somdy Duangdy said the budget hike is needed because the government plans to increase salaries for all employees, both civilian and military, in the next fiscal year which begins in October to help alleviate the hardship caused by the rising cost of living.
Officials say the increase of 31% in funding for government employees' salaries - from 1,996 billion kips in 2007-08 to 2,560 billions - will affect funding for national development projects which are expected to be reduced by 2%.
Reporting on the financial state of the nation, Mr. Somdy said for the first eight months of the current fiscal year which ends in September, the government has collected roughly 5,004 billion kips in domestic revenues but has incurred over 5,729 billion kips in expenses. For the rest of the year, the government says it expects to receive about 1,594 billion kips in income, and will contain expenses to 3,764 billion kips, so as to limit the budget deficit to no more than 2,894 billion kips.
The government says for the next fiscal year it will strive for a revenues of 7,514 billion kips and a budget deficit of no more than 1,685 billion kips, a decrease of 41% from the 2007-08 deficit, which it hopes to cover with some 752 billion kips in foreign grants and 1,685 billion kips in loans as in the past.
Listen to Songrit's report in Lao for further details.