23 Sep, 2024

Laos-China Railway Facilitates Regional Trade Surge, Handling Over 10 Million Tons of Goods

Since its launch on 3 December 2021, the Laos-China Railway has handled over 10 million tons of goods valued at CNY 40.77 billion (USD 5.74 billion) as of 16 September, according to local authorities.

In the first eight months of 2024, the railway reported a 22.8% increase in freight volume compared to the same period in 2023, reaching 3.58 million tons. The value of goods transported rose by 56%, totaling CNY 12.38 billion (USD 1.76 billion).

Initially designed to carry 500 types of goods, the railway now transports around 3,000 different products. It serves as an important route for mechanical and electrical items from China, as well as agricultural products, natural rubber, and tropical fruits from Laos and Thailand.

The railway has improved cargo transport efficiency in the region, benefiting trade between Laos and Thailand. Xu Liping, Director of the Centre for Southeast Asian Studies at the Chinese Academy of Social Sciences, noted that the railway reflects the strengthening economic ties between China and ASEAN countries.

In addition to enhancing transportation, the railway has stimulated local economies by creating jobs and supporting industrial development in sectors such as manufacturing and logistics. Experts like Wang Peng from the Beijing Academy of Social Sciences emphasize its role in promoting regional economic integration and connectivity.

Looking ahead, the upcoming China-ASEAN Expo in Nanning from 24 to 28 September is expected to further boost collaboration between China and ASEAN. Experts see opportunities for cooperation in emerging fields, including the digital and green economies.

Xu pointed to potential collaboration in smart city construction and the digital transformation of small and medium-sized enterprises, while Wang highlighted possibilities for exchanges in new energy, environmental protection, and green manufacturing.

25 Sep, 2024

Asian Development Bank Forecasts Economic Growth for Laos by Year-End Amid Challenges

The Asian Development Bank (ADB) has projected that Laos will experience a growth rate of 4.0% in 2024, supported by investments in services and clean energy. However, the report highlights ongoing macroeconomic challenges, particularly concerning public debt, which continue to hinder investment prospects and domestic consumption.In its latest Asian Development Outlook (ADO), the ADB revised its growth forecast for 2025 down to 3.7%, compared to the earlier projection of 4.0% made in April this year. The report also warns that inflation is expected to rise to an average of 21.5% in 2025, largely driven by price adjustments linked to the depreciation of the Lao kip.“International tourist arrivals are now approaching pre-pandemic levels, boosted by Laos’s ASEAN Chairmanship and Visit Laos Year 2024,” said ADB Country Director for Laos, Sonomi Tanaka. “However, risks to this outlook stem from debt distress, necessitating coordinated, transparent, and sustainable public financial management.”Despite the Bank of Laos increasing its 1-week interest rate from 8.5% in February to 10.5% in August and tightening foreign exchange controls, the kip continues to weaken. From January to August, it depreciated by 6.1% against the Thai baht and 7.5% against the US dollar, placing additional strain on the economy.As of August, inflation stood at 24.3% year-on-year, with the average for the first eight months of 2024 at 25.3%. A shortage of skilled labor due to out-migration has further pressured domestic prices and wages, prompting businesses to pass increased costs onto consumers and exacerbating inflationary expectations.Public debt levels remain critical. While total public and publicly guaranteed debt decreased slightly from USD 13.9 billion in 2022 to USD 13.8 billion in 2023—reducing the ratio from 112% to 108% of gross domestic product—the ratio of external debt service to total government revenue surged from 27% to 43%. Limited refinancing options in 2025, coupled with significant external debt maturities, are expected to constrain public sector access to foreign currency, negatively impacting private sector recovery and household spending.A Regional OverviewThe ADB has upgraded its economic growth forecast for developing Asia and the Pacific to 5.0% for 2024, an increase from a previous estimate of 4.9%. This positive outlook is attributed to strong domestic demand, robust exports—particularly in semiconductors driven by AI demand—and falling food prices. However, risks such as potential trade tensions between the United States. and China, ongoing issues in China’s property market, and geopolitical tensions persist.China’s growth forecast remains at 4.8%, while India’s is projected at 7.0%. Growth in the Caucasus and Central Asia has been revised up to 4.7%, and the Pacific’s forecast has been slightly increased to 3.4%. Southeast Asia’s growth forecast was lowered to 4.5% due to reduced public investments and a slower recovery in exports.Established in 1966, the ADB is owned by 68 members, with 49 from the region.

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20 Sep, 2024

Tether Expands Global Reach with $1.5M Investment in Africa and Asia

Tether has announced a strategic $1.5 million investment in Sorted Wallet, a revolutionary crypto wallet designed specifically for feature phones and low-powered smartphones. Launched in 2023, Sorted Wallet aims to enhance financial inclusion by providing secure crypto transactions for unbanked and underbanked populations, particularly in regions like Africa and Southern Asia.The wallet has already made significant strides, with over 70,000 downloads in its first year, making it an accessible platform for those who lack access to traditional banking services. Tether's investment reinforces the company’s mission to drive global financial accessibility, especially in regions with limited banking infrastructure.Financial Inclusion with Crypto: Tether's Mission in Emerging MarketsPaolo Ardoino, Tether’s CEO, emphasized the importance of this investment: “This underscores Tether’s commitment to advancing financial inclusion and economic empowerment in underserved regions.” By backing Sorted Wallet, Tether seeks to enable millions of individuals to access financial services via their mobile devices. Cryptocurrency is playing a pivotal role in regions like Africa, Central Asia, and Oceania, where traditional banking services are scarce. In countries like India, the use of crypto for fast remittances, investments, and stable alternatives to local currencies is growing at a rapid pace.How Sorted Wallet Expands Financial AccessWith Tether’s investment, Sorted Wallet is positioned to expand its reach across emerging markets, allowing users with even the most basic mobile devices to participate in the evolving digital economy. Stephen Browne, CEO of Sorted Wallet, remarked, "Financial empowerment should not depend on owning the latest smartphone. With Tether’s support, we’re turning this vision into a reality for millions."Tether’s Strategic Investment PortfolioThis move follows Tether’s recent interest in the agriculture sector. The company became the third-largest shareholder of Adecoagro, acquiring 9.8% of its shares as part of a broader strategy to diversify its investment portfolio, which now includes land, Bitcoin, and gold.Tether has also emerged as a major player in the U.S. treasury market. According to analysts at Bernstein, stablecoin issuers like Tether are among the 18th largest holders of U.S. treasuries, just behind Saudi Arabia. Tether’s profits from U.S. treasuries reached $5.2 billion in the first half of 2024, highlighting the growing importance of stablecoins in global finance.The Growing Stablecoin MarketThe stablecoin market is experiencing growth, with onchain payment volumes tripling to $1.4 trillion in the last 12 months. Stablecoins now account for 50% of all onchain transaction volumes, and the number of active users has increased to 22 million, with 120 million wallets holding non-zero balances.As Tether continues to lead the way in both financial inclusion and global finance, its investment in Sorted Wallet underscores a crucial shift towards a more connected digital economy.

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