## 1laoea2022001

## Source details

**Canonical URL:** [1laoea2022001](https://www.imf.org/-/media/files/publications/cr/2022/english/1laoea2022001.pdf)

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---

### Mission summary and priority recommendations
- Virtual TA mission delivered during October 4–29, 2021, supported by IMF APD, STA, and CDOT; delivered virtually by the CDOT-based LTX with staggered remote meetings.
- Main counterparts: Fiscal Policy and Law Department (FPLD) and External Finance and Debt Management Department (EFDMD).
- Objectives: Improve compilation of government finance statistics (GFS) and public sector debt statistics (PSDS) in line with international standards; review implications of recent developments on fiscal data systems.
- Key outcomes:
  - Quarterly and annual GFS for FY2017-FY2021 Q1 revised for analytical purposes using Official Gazette expenditure details for FY2017-FY2019 and shared with Lao team in APD. Recommendation: continue identifying causes of remaining data discrepancies and regularly review source data to narrow fiscal data discrepancies.
  - Quarterly GFS for social security fund (SSF) for Q1 and Q2 2021 compiled from monthly NSSF operational data and submitted to STA. Recommendation: further review SSF operations data to ensure accurate consolidated GFS with the SSF.

### Priority recommendations (as presented)
- Target Date: December 2021
  - Continue compilation of quarterly/annual GFS for consolidated central government by including SSF and disseminate to the IMF and on the MOF website.
  - Responsible: FPLD and NSSF
- Target Date: March 2022
  - Compile and disseminate annual GFS for central government by consolidating BCG with extrabudgetary funds.
  - Responsible: FPLD and relevant institutions responsible for extrabudgetary funds
- Target Date: June 2022
  - Compile and disseminate quarterly PSDS based on the PSDS template. Collect arrears data on the Government and SOEs and compile supplementary data for GFS.
  - Responsible: FPLD, EFDMD and SOERD
- Target Date: Ongoing
  - Compile and disseminate annual GFS in a summary sheet from detailed budget execution data of the Official Gazette (derived from the GFIS).
  - Responsible: FPLD and Budget Department
- Target Date: September 2022
  - Compile annual GFS for major nonfinancial public corporations in coordination with relevant ministries and SOEs.
  - Responsible: FPLD, SOEMD and relevant ministries and SOEs

### Updated action plan (priority actions and target completion dates)
- Timely disseminate quarterly GFS using preliminary secondary data collected from data providers.
  - Target Completion Date: Ongoing
- Collect detailed transaction data from the EFDMD and the National Treasury Department (NTD) using revised reporting templates for reconciliation and improved fiscal data accuracy.
  - Target Completion Date: Mar 2022, onwards
- Compile and disseminate quarterly/annual GFS for the SSF and extrabudgetary funds and the consolidated central government.
  - Target Completion Date: Ongoing
- Revise annual GFS from FY2017 (January–December) based on detailed Official Gazette budget execution data (GFIS) and disseminate on MOF website.
  - Target Completion Date: Ongoing
- Compile and disseminate quarterly GFS for development aid funded capital expenditures from FY2020 onwards (summary sheet from MPI data) and disseminate on MOF website.
  - Target Completion Date: March 2022, onwards
- Compile quarterly PSDS starting with FY2021 based on the PSDS template and disseminate to the IMF and on the MOF website. Collect arrears data on the Lao Government and SOEs and compile supplementary data for GFS.
  - Target Completion Date: June 2022, onwards
- Disseminate quarterly and annual GFS from FY2010 onwards on the MOF website.
  - Target Completion Date: Ongoing
- Compile GFS for SOEs (nonfinancial public corporations) after delineation by sector and establish reporting requirements.
  - Target Completion Date: September 2022, onwards
- Compile annual GFS for nonfinancial public sector.
  - Target Completion Date: September 2022, onwards

### Regular GFS compilation and timeliness — findings and recommended actions
Findings:
- Timeliness of GFS compilation and dissemination to IMF has been gradual; data are still not regularly reconciled in a timely basis.
- MOF Consultative Group on GFS/fiscal reporting requested in April/May 2021 has not been established.
- Monthly budget execution data aggregate "Other Allowances" (about 10 percent of total expense in their GFS) currently classified as other expense under GFSM 2014 classification (code 28).
- For analysis, quarterly and annual GFS for FY2017-FY2021 Q1 were revised with breakdown of other expenses reclassified using Official Gazette detailed expenditure for FY2017-FY2019.
- Quarterly and annual GFS and annual budget execution data for FY2020 were posted on MOF website under e-GDDS reporting.

Recommended actions:
- Strengthen coordination with data reporting departments within MOF and Bank of Laos for timely data sharing to enable regular GFS compilation using preliminary accounting data.
- Continue compiling annual GFS in bridge tables based on summary table of latest Official Gazette and disseminate on MOF website with IT Department coordination.
- Review linkage between Official Gazette data and budget execution data to improve classification and data accuracy.
- Establish MOF Consultative Group on GFS/fiscal reporting to improve GFS/PSDS compilation and dissemination, work on source data reconciliations, data sharing, and track COVID-19 spending through the budget (including functional classification).

### Improving fiscal data accuracy — findings and recommended actions
Findings:
- FPLD agreed with EFDMD and NTD on data sharing for tracking expenditure line items during the complimentary period, on-lending data, other domestic financing data and debt data; a revised reporting template was designed.
- Progress hampered by internal approval rigidity for releasing data, inertia in cooperation with FPLD, and COVID-19 work restrictions.
- Major expenditure data from COA during the complimentary period for FY2019 (Jan–Mar 2020) and FY2020 (Jan–Mar 2021) provided to FPLD and used for cross-checking.
- Official Gazette presents only total foreign aid funded capital expenditures; MPI records these by project and sector without economic classification. Monthly budget execution data presents only total capital expenditure with breakdown of budget funded and foreign aid funded capital expenditure.

Recommended actions:
- Continue investigation of causes of fiscal data discrepancies and follow up with PDMD on financing data sharing (on-lending to SOEs).
- Initiate discussion with MPI, with CDOT PFM Advisor cooperation, to arrange data sharing for detailed foreign aid funded capital expenditure to compile GFS according to GFSM 2014 economic classification.

### Broadening institutional coverage of GFS — findings and recommended actions
Findings:
- List of current SOEs and summary of draft SOEs Development Strategy provided to FPLD and GFS-LTX for selecting major SOEs for GFS compilation.
- Quarterly and annual GFS for SSF for FY2021 Q1 and Q2 compiled by FPLD based on monthly SSF operational data; SSF operations data including government transfers need review before consolidation.
- Tentative information: Ministry of Defense and police authorities excluded from current SSF coverage and scheme from FY2021.
- Draft Decree indicated Oil Fund would qualify as an extrabudgetary fund under GFSM 2014; Decree to be submitted to PMO in second half of 2021. Oil Fund implementation postponed indefinitely by MOF due to lower budgetary revenues.

Recommended actions:
- Follow up with SOERD on SOEs Development Strategy and prepare updated list of SOEs with tax and relevant data for major SOE selection.
- Discuss with parent ministries and MOF’s SOERD to collect financial statements and data for delineation and proper classification of major SOEs (nonfinancial public corporations vs central government).
- Follow up with NSSF on new SSF scheme for Ministry of Defense and police; include data in GFS when available.
- Continue collecting financial statements of three identified extrabudgetary funds aiming to compile quarterly or annual GFS for them.
- Identify funds managed by line ministries and collect transaction data through coordination.

### Regular PSDS compilation and dissemination — findings
- EFDMD agreed in November 2019 GFS TA mission to compile quarterly PSDS from FY2018 based on revised PSDS template using EFDMD source data, compliant with PSDS Guide 2013 and IMF/World Bank QPSD reporting formats.
- Delay in recent quarterly PSDS compilation due to DMFAS system upgrade work and training of MOF staff.

### Follow-up on PSDS compilation and arrears recording
- FPLD followed up with EFDMD on quarterly PSDS compilation including arrears recording.
- EFDMD reconfirmed commitment to compile quarterly PSDS and share financing flows (on-lending to SOEs) after reorganization of EFDMD expected to finish by end of 2021.
- EFDMD agreed domestic government arrears and SOE arrears (domestic and external) will be discussed after reorganization.
- Debt Bulletin for FY2021 expected to be published in May 2022.
- Domestic and foreign debts are managed by EFDMD using the DMFAS system.
- With current data availability, quarterly PSDS will cover:
  - (i) debt securities (issued in Lao PDR and overseas) and foreign borrowing by the government; and
  - (ii) domestic borrowing by SOEs from the government and external borrowing by EDL (guaranteed by the government).
- EFDMD reported no arrears on external borrowing by the Lao PDR Government, except delay due to technical reasons.
- On-lending data not included in monthly budget execution data and Official Gazette data, while SOE repayments to government for on-lending are recorded in both datasets; this contributes to fiscal data discrepancy.

Recommended PSDS actions:
- Compile quarterly PSDS in early 2022 or sooner, if feasible, using PSDS template and available source data; compile time series of back data as feasible. Initiate compilation of partial public sector debt data until full quarterly PSDS is completed.
- Prepare arrears data reporting template for government debt, and debt by SOEs and other corporations including PPPs controlled or owned by Government after reorganization.
- EFDMD should disseminate quarterly PSDS on MOF website and is strongly encouraged to disseminate on the IMF/World Bank PSDS debt database (within two quarters) in compliance with e-GDDS reporting guidelines.

### Tracing COVID-19 related spending under annual budget for FY2021 and FY2022
- Fiscal measures for COVID-19 response implemented under FY2021 annual budget (Jan-Dec) as part of fiscal package approved by National Assembly in December 2020.
- Inter-ministerial committee comprising MOF, Ministry of Public Health, Ministry of Welfare, and other ministries organized in 2020 to implement COVID-19 fiscal measures in FY2021 and FY2022 budgets.
- Annual budget for FY2022 including fiscal package for COVID-19 submitted to National Assembly in Nov/Dec 2021; COVID-19 measures incorporated into annual budget.
- Presidential or Ministerial Decree on FY2022 fiscal package including COVID-19 measures expected to be issued in December 2021 and will be available to GFS-LTX when approved by Minister.

Recommended actions on COVID-19 spending:
- Coordinate with relevant departments including Budget Department and Inter-ministerial Committee to collect data for tracing and monitoring COVID-19 related spending.
- Prepare quarterly report on COVID-19 spending based on template to be developed with LTX support and report to IMF.

### Selected fiscal and GFS key figures and data issues
- Accounting method: CASH.
- EFDMD uses DMFAS to manage domestic and foreign debts.
- Reorganization of EFDMD expected to be finished by end of 2021.
- Debt Bulletin for FY2021 expected to be published in May 2022.
- Examples of nominal GDP values reported:
  - Nominal GDP (Lao data) (B): 140,749,000.0; 152,414,000.0; 164,017,000.0; 177,780,000.0; 182,603,000.0.
- Examples of fiscal data discrepancies (in term of GDP) reported:
  - 0.1%; 0.1%; 0.5%; 0.5%; 0.0%; 0.0%; 0.1%; 0.0%; 0.0%; 0.0%; 0.0%; -0.1%; 0.0%; 0.0%.
- Reporting and classification issues between data sources (BED and OGD) include:
  - On-lending to SOEs captured/recorded differently across datasets.
  - Disbursement data during the complimentary period not aligned with bank financing data (treasury account).
  - Investment in shares in the OGD classified as financial assets, while recorded as capital expenditure in the BED.
  - Differences in classification of expenditure items (e.g., subsidy, use of goods and services, social benefits) and revenue items between Lao classification and GFS classification.
  - BED is aggregated and linkage between BED and OGD is not always clear; OGD has about 1.5 years' time lag until publication.

### Appendix III-2 — Selected transactions and discrepancies (FY2017–FY2020)
- Revenue (line 1):
  - 2017: 22,925,011.8
  - 2018: 24,758,341.6
  - 2019: 25,340,525.4
  - 2020: 24,059,063.5
- Taxes (line 11):
  - 2017: 17,184,418.3
  - 2018: 17,894,439.8
  - 2019: 18,649,529.6
  - 2020: 16,143,529.7
- Grants (line 13):
  - 2017: 2,197,063.4
  - 2018: 2,929,309.6
  - 2019: 2,632,186.0
  - 2020: 2,565,283.1
- Expense (line 2):
  - 2017: 17,232,118.6
  - 2018: 18,762,566.0
  - 2019: 20,270,828.4
  - 2020: 19,570,724.4
- Compensation of employees (line 21):
  - 2017: 10,212,855.9
  - 2018: 10,665,652.1
  - 2019: 10,897,932.7
  - 2020: 11,097,109.6
- Interest (line 24):
  - 2017: 1,947,381.2
  - 2018: 2,596,764.6
  - 2019: 2,868,322.6
  - 2020: 2,609,480.1
- Acquisition of Nonfinancial Assets (31A / Fixed assets 311A):
  - 2017: 13,073,860.0
  - 2018: 12,803,168.0
  - 2019: 10,076,371.9
  - 2020: 11,122,555.5
- Net lending / borrowing (NLB):
  - 2017: -7,320,553.6
  - 2018: -7,574,644.4
  - 2019: -4,749,396.7
  - 2020: -8,801,330.9
- Net incurrence of liabilities (33):
  - 2017: 8,516,962.4
  - 2018: 3,702,843.4
  - 2019: 4,262,354.5
  - 2020: 6,528,617.4
- Financing Discrepancy (A):
  - 2017: 53,506.7
  - 2018: 1,284,408.3
  - 2019: -904,997.9
  - 2020: -590,900.6
- Nominal GDP (B) — Lao data:
  - 2017: 140,749,000.0
  - 2018: 152,414,000.0
  - 2019: 164,017,000.0
  - 2020: 177,780,000.0
- Fiscal data discrepancies ((A)/(B)):
  - 2017: 0.0%
  - 2018: 0.8%
  - 2019: -0.6%
  - 2020: -0.3%

### Appendix IV — Annual GFS projections for budgetary central government (Billion kips)
Aggregate projections: FY2021–FY2025 (Plan / Projection)
- I. Total Revenue (1 + 2 + 3 + 4)
  - 2021: 27,629
  - 2022: 29,423
  - 2023: 33,884
  - 2024: 40,515
  - 2025: 48,048
  - Total 2021 - 2025: 179,500
- 1. Domestic revenue (ກ + ຂ)
  - 2021: 24,872
  - 2022: 26,963
  - 2023: 31,384
  - 2024: 37,985
  - 2025: 45,548
  - Total 2021 - 2025: 166,753
  - ກ Tax Revenue
    - 2021: 20,925
    - 2022: 23,284
    - 2023: 27,043
    - 2024: 33,194
    - 2025: 40,330
    - Total: 144,776
  - ຂ Non tax revenue
    - 2021: 3,947
    - 2022: 3,679
    - 2023: 4,341
    - 2024: 4,791
    - 2025: 5,218
    - Total: 21,977
- 2. Grants
  - 2021: 2,420
  - 2022: 2,460
  - 2023: 2,500
  - 2024: 2,530
  - 2025: 2,500
  - Total: 12,410
- 4. From Audit
  - 2021: 337
  - 2022–2025: 337
- II. Total expenditures (A + ງ ຫຼ ື 5 + 6)
  - 2021: 31,583
  - 2022: 33,713
  - 2023: 35,881
  - 2024: 41,681
  - 2025: 47,142
  - Total 2021 - 2025: 190,000
- 5. Current expenditures
  - 2021: 21,277
  - 2022: 23,013
  - 2023: 24,741
  - 2024: 29,021
  - 2025: 32,448
  - Total: 130,500
- 6. Capital Expenditure (ຄ + ງ)
  - 2021: 10,306
  - 2022: 10,700
  - 2023: 11,140
  - 2024: 12,660
  - 2025: 14,694
  - Total: 59,500
  - ຄ Domestics
    - 2021: 3,900
    - 2022: 3,950
    - 2023: 4,000
    - 2024: 4,900
    - 2025: 6,200
    - Total: 22,950
  - ງ Foreign
    - 2021: 6,406
    - 2022: 6,750
    - 2023: 7,140
    - 2024: 7,760
    - 2025: 8,494
    - Total: 36,550
    - Project loans
      - 2021: 3,986
      - 2022: 4,290
      - 2023: 4,640
      - 2024: 5,230
      - 2025: 5,994
      - Total: 24,140
    - Project grants
      - 2021: 720
      - 2022: 730
      - 2023: 740
      - 2024: 750
      - 2025: 740
      - Total: 3,680
    - Non-project grants
      - 2021: 1,700
      - 2022: 1,730
      - 2023: 1,760
      - 2024: 1,780
      - 2025: 1,760
      - Total: 8,730
- III. Balances (I. - II.)
  - 2021: -3,954
  - 2022: -4,290
  - 2023: -1,997
  - 2024: -1,166
  - 2025: 906
  - Total 2021 - 2025: -10,500

Ratios to GDP (percent of GDP) — FY2021–FY2025 projections
- I. Total Revenue (1 + 2 + 3)
  - 2021: 15.1%
  - 2022: 15.0%
  - 2023: 16.2%
  - 2024: 18.0%
  - 2025: 19.8%
  - Total 2021 - 2025: 17.0%
- 1. Domestic revenue (ກ + ຂ)
  - 2021: 13.6%
  - 2022: 13.8%
  - 2023: 15.0%
  - 2024: 16.8%
  - 2025: 18.8%
  - Total: 15.8%
  - ກ Tax Revenue
    - 2021: 11.5%
    - 2022: 11.9%
    - 2023: 12.9%
    - 2024: 14.7%
    - 2025: 16.6%
    - Total: 13.7%
  - ຂ Non tax revenue
    - 2021: 2.2%
    - 2022: 1.9%
    - 2023: 2.1%
    - 2024: 2.1%
    - 2025: 2.1%
    - Total: 2.1%
- 2. Grants
  - 2021: 1.3%
  - 2022: 1.3%
  - 2023: 1.2%
  - 2024: 1.1%
  - 2025: 1.0%
  - Total: 1.2%
- II. Total expenditures (A + ງ ຫຼ ື 5 + 6)
  - 2021: 17.3%
  - 2022: 17.2%
  - 2023: 17.1%
  - 2024: 18.5%
  - 2025: 19.4%
  - Total: 18.0%
- 4. Current expenditures
  - 2021: 11.7%
  - 2022: 11.7%
  - 2023: 11.8%
  - 2024: 12.9%
  - 2025: 13.4%
  - Total: 12.3%
- 5. Capital Expenditure (ຄ + ງ)
  - 2021: 5.6%
  - 2022: 5.5%
  - 2023: 5.3%
  - 2024: 5.6%
  - 2025: 6.1%
  - Total: 5.6%
  - ຄ Domestics
    - 2021: 2.1%
    - 2022: 2.0%
    - 2023: 1.9%
    - 2024: 2.2%
    - 2025: 2.6%
    - Total: 2.2%
  - ງ Foreign
    - 2021: 3.5%
    - 2022: 3.4%
    - 2023: 3.4%
    - 2024: 3.4%
    - 2025: 3.5%
    - Total: 3.5%
- III. Balances (I. - II.)
  - 2021: -2.17%
  - 2022: -2.2%
  - 2023: -1.0%
  - 2024: -0.5%
  - 2025: 0.4%
  - Total 2021 - 2025: -1.0%

GDP (ຕື້ກີບ) projections (Billion kips)
- 2021: 182,603
- 2022: 195,961
- 2023: 209,781
- 2024: 225,584
- 2025: 242,763
- Total 2021 - 2025: 1,056,692

*Source: 1laoea2022001 - 1. Priority Recommendations; 15. The FPLD followed up with the EFDMD on the compilation of quarterly PSDS; Appendix III-2; Appendix IV; Appendix V.*

### 1.   Priority Recommendations _______________________________________________________________________ 6

### 1.   Priority Recommendations

### Summary of mission outcomes and priority recommendations
- A virtual technical assistance (TA) mission supported by the IMF’s Asia and Pacific Department (APD) was conducted during October 4–29, 2021, by the IMF Statistics Department (STA) and the Capacity Development Office in Thailand (CDOT). The ongoing peripatetic capacity development mission was delivered virtually by the CDOT-based LTX with staggered remote meetings.
- The TA mainly worked with the Fiscal Policy and Law Department (FPLD) and the External Finance and Debt Management Department (EFDMD) on compilation of government finance statistics (GFS) and public sector debt statistics (PSDS) in line with international standards, as the agreed work plan with the authorities in the April/May 2021 TA mission.
- The October 2021 mission assisted the authorities in improving GFS and PSDS data compilation procedures including data accuracy and reviewed implication of evolving recent developments on fiscal data systems.
- Key outcomes:
  - (i) Quarterly and annual GFS for FY2017-FY2021 Q1 were revised for analytical purpose using details of expenditure data of the official gazette for FY2017-FY2019 (the latest available) and shared with the Lao team in APD (Appendix I). The mission recommended that the causes for the remaining data discrepancies should continue to be identified and source data need to be regularly reviewed to narrow fiscal data discrepancies.
  - (ii) Quarterly GFS for social security fund (SSF) for Q1 and Q2 2021 were compiled based on monthly SSF operational data provided by the National Social Security Fund (NSSF) and submitted to the STA (Appendix II). The mission recommended that the SSF operations data need to be further reviewed to ensure accurate consolidated GFS with the SSF.

### Recent developments (selected)
- (i) The EFDMD is expected to be split into two departments by the end of 2021: the External Finance Department (EFD) and the Public Debt Management Department (PDMD). Detailed functions of the two departments and their respective divisions are being discussed. The EFDMD committed to initiate compilation of quarterly PSDS in May 2022 according to the PSDS template based on the IMF/World Bank quarterly PSDS debt database once the new departments operate. The Debt Bulletin for 2021 is also expected to be published in May 2022. The mission recommended that public debt data in any template with high frequency should be published as early as feasible for debt analysis.
- (ii) A current list of SOEs and a summary of SOEs Development Strategy (2021-2025) were provided to the GFS-LTX by the SOEs Reform Department (SOERD). The Strategy is still being drafted and will be launched by the end of 2021 and shared with the GFS-LTX once the Minister approves. The mission recommended that once the strategy is finalized, information on SOEs should be shared with the upcoming peripatetic TA missions with the aim of selecting major SOEs for compilation of GFS for nonfinancial public corporations.

### Table 1. Priority Recommendations (as presented)
- Target Date: December 2021
  - Priority Recommendation: Continue compilation of quarterly/annual GFS for consolidated central government by including SSF and disseminate to the IMF and on the MOF website.
  - Responsible Institutions: FPLD and NSSF
- Target Date: March 2022
  - Priority Recommendation: Compile and disseminate annual GFS for central government by consolidating BCG with extrabudgetary funds.
  - Responsible Institutions: FPLD and relevant institutions responsible for extrabudgetary funds
- Target Date: June 2022
  - Priority Recommendation: Compile and disseminate quarterly PSDS based on the PSDS template. Collect arrears data on the Government and SOEs and compile supplementary data for GFS.
  - Responsible Institutions: FPLD, EFDMD and SOERD
- Target Date: Ongoing
  - Priority Recommendation: Compile and disseminate annual GFS in a summary sheet from the detailed budget execution data of the Official Gazette (derived from the GFIS).
  - Responsible Institutions: FPLD and Budget Department
- Target Date: September 2022
  - Priority Recommendation: Compile annual GFS for major nonfinancial public corporations in coordination with the relevant ministries and SOEs.
  - Responsible Institutions: FPLD, SOEMD and relevant ministries and SOEs

### Updated Action Plan (priority actions and target completion dates)
- H Timely disseminate quarterly GFS using preliminary secondary data collected from data providers.
  - Target Completion Date: Ongoing
- H Collect detailed transaction data from the EFDMD and the National Treasury Department (NTD) using revised data reporting templates to allow reconciliation and improved fiscal data accuracy.
  - Target Completion Date: Mar 2022, onwards
- H Compile and disseminate quarterly/annual GFS for the SSF and the extrabudgetary funds and the consolidated central government.
  - Target Completion Date: Ongoing
- H Revise annual GFS from FY2017 (January–December) based on annual detailed budget execution data in the Official Gazette from the GFIS and disseminate it on MOF website.
  - Target Completion Date: Ongoing
- H Compile and disseminate quarterly GFS for development aid funded capital expenditures from FY2020 onwards in a summary sheet derived from detailed Ministry of Planning and Investment (MPI) data and disseminate it on the MOF website (with the other summary tables in the Official Gazette).
  - Target Completion Date: March 2022, onwards
- H Compile quarterly PSDS starting with FY2021 based on the PSDS template and disseminate them to the IMF and on the MOF website. Collect arrears data on the Lao Government and SOEs and compile supplementary data for GFS.
  - Target Completion Date: June 2022, onwards
- H Disseminate quarterly and annual GFS from FY2010 onwards on the MOF website.
  - Target Completion Date: Ongoing
- M Compile GFS for SOEs (nonfinancial public corporations) based on data available after delineation by sector and establish reporting requirements.
  - Target Completion Date: September 2022, onwards
- M Compile annual GFS for nonfinancial public sector.
  - Target Completion Date: September 2022, onwards

### Regular GFS compilation and timeliness (findings and recommended actions)
Findings:
- Progress on timeliness of GFS compilation and dissemination to the IMF has been gradual due to improved coordination between the FPLD and data providers, but data are still not regularly reconciled in a timely basis.
- A MOF Consultative Group on GFS/fiscal reporting requested in April/May 2021 has not been established.
- Monthly budget execution data aggregate "Other Allowances" (about 10 percent of total expense in their GFS) currently classified as other expense under the GFSM 2014 classification (code 28).
- For analytical purposes, quarterly and annual GFS for FY2017-FY2021 Q1 were revised with breakdown of other expenses reclassified using detailed expenditure in the official gazette for FY2017-FY2019 and shared with the Lao team in APD.
- Quarterly and annual GFS and annual budget execution data for FY2020 were posted on the MOF website under the e-GDDS reporting.

Recommended Actions:
- Further strengthen coordination and cooperation with the data reporting departments within the MOF, and with the Bank of Laos to ensure timely data sharing to regular compilation of Lao PDR’s GFS using preliminary accounting data.
- Continue to compile annual GFS in bridge tables based on data in a summary table of the latest official gazette available and disseminate on the MOF website by coordinating with the IT Department.
- Review linkage with the official gazette data (how items of budget execution data are linked to the official gazette data) in compiling budget execution data and classification of the budget execution data to improve their data accuracy further.
- Set up a MOF Consultative Group on GFS/fiscal reporting to improve GFS/PSDS data compilation and dissemination procedures through enhanced source data reconciliations and GFS/PSDS data sharing with other stakeholders. This Group should also work closely with FPLD to identify and track COVID-19 spending through the budget, including their functional classification.

### Improving fiscal data accuracy (findings and recommended actions)
Findings:
- The FPLD agreed with the EFDMD and the NTD on data sharing for tracking expenditure data by line items for spending during the complimentary period, on-lending data, other domestic financing data and debt data; a revised data reporting template was designed.
- Progress has been hampered by rigidity in internal approval processes for releasing data, inertia in cooperation on data sharing with the FPLD, and COVID-19 work restrictions.
- Major expenditure data from COA during the complimentary period for FY2019 (Jan–Mar 2020) and FY2020 (Jan–Mar 2021) were provided to the FPLD and used for cross-checking data accuracy.
- The Official Gazette data is produced based on the COA and presents only total number of foreign aid funded capital expenditures; foreign aid funded capital expenditures are recorded on a project and sector basis by MPI with no economic classification. Monthly budget execution data presents only total number of capital expenditure with breakdown of budget funded capital expenditure and foreign aid funded capital expenditure.

Recommended actions:
- Continue to investigate causes of fiscal data discrepancies for accurate GFS compilation and follow up with the PDMD on financing data sharing (on-lending to SOEs).
- Initiate discussion with the MPI, with cooperation of the CDOT PFM Advisor, to agree on data sharing arrangement to collect detailed data of foreign aid funded capital expenditure to compile GFS according to economic classification under the GFSM 2014.

### Broadening institutional coverage of GFS (findings and recommended actions)
Findings:
- A list of current SOEs and summary of draft SOEs Development Strategy were provided to the FPLD and the GFS-LTX to be used for selecting major SOEs for compilation of GFS for major nonfinancial public corporations.
- Quarterly and annual GFS for the SSF for FY2021 Q1 and Q2 were compiled by the FPLD based on monthly SSF operational data; SSF operations data including transfer from the government need to be reviewed before consolidated with the budgetary central government.
- Tentative information indicates the Ministry of Defense and the police authorities were excluded from the current SSF coverage and scheme from FY2021.
- Based on preliminary information in the draft Decree, the Oil Fund would have qualified as an extrabudgetary fund under the GFSM 2014; the Decree was to be submitted to the PMO in the second half of 2021. The Oil Fund implementation was postponed indefinitely by the MOF due to lower budgetary revenues.

Recommended Actions:
- Follow up with the SOERD on progress of the SOEs Development Strategy and prepare a list of the latest SOEs with tax data and other relevant information available for major SOEs selection.
- Initiate discussions with parent ministries and the MOF’s SOERD on collecting detailed information, financial statements, and other data for delineation of major SOEs for proper classification (as nonfinancial public corporations or as part of central (general) government) for GFS coverage. The initial step will be to identify the major SOEs based on “macro-critical” SOE approach and produce a final list of the major SOEs.
- Follow up with the NSSF on a new SSF scheme for the Ministry of Defense and the police authorities which were excluded from the current SSF framework; and when this data becomes available, include them in GFS for SSF covering these institutions.
- Continue collecting financial statements of three identified extrabudgetary funds, with the aim of compiling quarterly or annual GFS for these extrabudgetary funds.
- Identify funds managed by line ministries through coordination with these ministries and collect data on transactions made through these funds.

### Regular PSDS compilation and dissemination (findings)
- The EFDMD agreed in the November 2019 GFS TA mission on compiling quarterly PSDS from FY2018 based on the PSDS template revised to reflect their requests and using the EFDMD source data. These data would be compliant with the guidelines of the PSDS Guide 2013 and the reporting formats of the IMF/World Bank QPSD database.
- There has been a delay in the compilation of recent quarterly PSDS due to multiple reasons including work on the DMFAS system upgrade and training of the relevant MOF staff using the system.

*Source: 1laoea2022001 - 1.   Priority Recommendations*

### 15. The FPLD followed up with the EFDMD on the compilation of quarterly PSDS

### 15. The FPLD followed up with the EFDMD on the compilation of quarterly PSDS

### Follow-up and commitments on PSDS compilation and arrears recording
- The FPLD followed up with the EFDMD on the compilation of quarterly PSDS including arrears data recording based on their agreement.
- The EFDMD reconfirmed their commitment on compilation of quarterly PSDS and data sharing on financing flows (on-lending to SOEs) soon after the on-going reorganization process in the EFDMD which is expected to be finished by the end of 2021.
- The EFDMD agreed that arrears held by the government (domestic arrears) and the SOEs (domestic and external arrears) will be discussed further after the reorganization.
- The Debt Bulletin for FY2021 (with a reporting coverage that is narrower and less frequent than the PSDS) is expected to be published in May 2022.
- Domestic and foreign debts are managed by the EFDMD using the DMFAS system.
- With current data availability, the following debt instruments and institutions will be covered by quarterly PSDS:
  - (i) debt securities (issued in Lao PDR and overseas) and foreign borrowing by the government; and
  - (ii) domestic borrowing by the SOEs from the government and external borrowing by the EDL (electricity power generation company), which is guaranteed by the government.
- The EFDMD informed in the remote TA that there were no arrears on external borrowing by the Lao PDR Government, except for the delay in repayment due to technical reasons.
- On-lending data has not been included in monthly budget execution data and official gazette data, while repayment to the government by the SOEs for on-lending is recorded in both data sets. This is one of causes of fiscal data discrepancy.

### Recommended actions on PSDS and arrears
- Compile quarterly PSDS in early 2022 or sooner for debt analysis if feasible based on the PSDS template using available source data and, in due course, compile a time series of back data as much as feasible. Compilation of partial data of public sector debt (until completion of quarterly PSDS based on the PSDS template) will be initiated.
- Prepare arrears data reporting template on government debt; and debt by SOEs and other types of corporations, including public-private partnership (PPP) controlled or owned by the Government after the on-going reorganization is finished.
- The EFDMD should disseminate quarterly PSDS on the MOF website and is strongly encouraged to disseminate quarterly PSDS on the IMF/World Bank PSDS debt database (within two quarters) in compliance with the guidelines of the Enhanced General Data Dissemination System (e-GDDS) reporting.

### Tracing COVID-19 related spending under annual budget for FY2021 and FY2022
- Fiscal measures for COVID-19 pandemic response were implemented under the current annual budget for FY2021 (Jan-Dec) as part of fiscal package of FY2021 annual budget, approved by the National Assembly in December 2020.
- An Inter-ministerial committee, comprising the MOF, the Ministry of Public Health, the Ministry of Welfare, and other relevant ministries, was organized in 2020 to implement fiscal measures for COVID-19 response in the annual budgets for FY2021 and FY2022.
- The Annual budget for FY2022 including fiscal package including fiscal measures for COVID-19 pandemic response was submitted to the National Assembly in Nov/Dec 2021. Fiscal measures for COVID-19 response is incorporated into the annual budget.
- Either a Presidential or a Ministerial Decree on fiscal package for FY2022 including COVID-19 measures is expected to be issued in December 2021 and will be available for the GFS-LTX when it is approved by the Minister.

### Recommended actions on tracing COVID-19 spending
- Coordinate with relevant departments including the Budget Department in the reporting system and/or the Inter-ministerial Committee to collect data for COVID-19 related spending for tracing and monitoring the spending.
- Prepare quarterly report on COVID-19 spending based on the template to be developed with support of the LTX and report to IMF.

### Selected fiscal and GFS key figures and data issues (as reported)
- Accounting method: CASH.
- The EFDMD uses the DMFAS system to manage domestic and foreign debts.
- Reorganization of EFDMD expected to be finished by the end of 2021.
- Debt Bulletin for FY2021 expected to be published in May 2022.
- Examples of nominal GDP values reported:
  - Nominal GDP (Lao data) (B): 140,749,000.0; 152,414,000.0; 164,017,000.0; 177,780,000.0; 182,603,000.0.
- Examples of fiscal data discrepancies (in term of GDP) reported:
  - 0.1%; 0.1%; 0.5%; 0.5%; 0.0%; 0.0%; 0.1%; 0.0%; 0.0%; 0.0%; 0.0%; -0.1%; 0.0%; 0.0%.
- Reporting and classification issues identified between data sources (BED and OGD), including:
  - On-lending to SOEs captured/recorded differently across datasets.
  - Disbursement data during the complimentary period not aligned with bank financing data (treasury account).
  - Investment in shares in the OGD are classified as financial assets, while recorded as capital expenditure in the BED.
  - Differences in classification of expenditure items (e.g., subsidy, use of goods and services, social benefits) and revenue items between Lao classification and GFS classification.
  - BED is aggregated and linkage between BED and OGD is not always clear; OGD has about 1.5 years' time lag until publication.

*Source: 15. The FPLD followed up with the EFDMD on the compilation of quarterly PSDS (excerpt).*

### Appendix III-2: Comparison of Official Gazette Data and Budget Execution Data for FY2019

### Appendix III-2: Comparison of Official Gazette Data and Budget Execution Data for FY2019

### Data alignment and frequency
- Aligned with disbursement data during the complimentary period.
- Note: "No aligned with disbursement data during the complimentary period" appears as an alternative note indicating misalignment for some entries.
- Expenditure data during the complimentary data was added to net acquisition of financial assets (Domestic - Currency and deposits) for FY2019 and FY2020 in order to check the impacts on fiscal data discrepancy as it was included in above-the-line data.

### Transactions affecting net worth (selected line items, FY2017–FY2020)
- Revenue (line 1):
  - 2017: 22,925,011.8
  - 2018: 24,758,341.6
  - 2019: 25,340,525.4
  - 2020: 24,059,063.5
  - (repeated series) 22,925,011.8, 24,758,341.6, 25,340,525.4, 21,830,858.5
- Taxes (line 11):
  - 2017: 17,184,418.3
  - 2018: 17,894,439.8
  - 2019: 18,649,529.6
  - 2020: 16,143,529.7
  - (repeated) 17,226,721.2, 17,863,905.8, 18,649,529.6, 16,143,529.7
- Grants (line 13):
  - 2017: 2,197,063.4
  - 2018: 2,929,309.6
  - 2019: 2,632,186.0
  - 2020: 2,565,283.1
  - (repeated) 2,345,531.9, 2,929,309.6, 2,632,186.0, 2,565,283.1
- Other revenue (line 14):
  - 2017: 3,191,727.7
  - 2018: 3,965,126.2
  - 2019: 4,058,809.8
  - 2020: 3,122,045.7
  - (repeated) 3,352,758.7, 3,965,126.2, 4,058,809.8, 3,122,045.7

- Expense (line 2):
  - 2017: 17,232,118.6
  - 2018: 18,762,566.0
  - 2019: 20,270,828.4
  - 2020: 19,570,724.4
  - (repeated) 17,362,142.0, 18,762,566.0, 20,247,308.4, 19,570,724.4

- Compensation of employees (line 21):
  - 2017: 10,212,855.9
  - 2018: 10,665,652.1
  - 2019: 10,897,932.7
  - 2020: 11,097,109.6
  - (repeated) 10,212,355.9, 10,665,652.1, 10,874,412.7, 11,097,109.6

- Use of goods and services (line 22):
  - 2017: 2,897,344.0
  - 2018: 3,114,589.5
  - 2019: 3,639,362.4
  - 2020: 3,079,811.0
  - (repeated) 3,062,035.0, 3,114,589.5, 3,639,362.4, 3,079,811.0

- Interest (line 24):
  - 2017: 1,947,381.2
  - 2018: 2,596,764.6
  - 2019: 2,868,322.6
  - 2020: 2,609,480.1
  - (repeated) 1,910,795.2, 2,596,764.6, 2,868,322.6, 2,609,480.1

- Subsidies (line 25):
  - 2017: 1,211,525.0
  - 2018: 1,309,987.0
  - 2019: 1,619,917.8
  - 2020: 1,562,713.9
  - (repeated) 1,213,943.4, 1,309,987.0, 1,619,917.8, 1,562,713.9

- Social benefits (line 27) (noting shift in later series):
  - 2017–2019: 0.0
  - Later series: 914,117.7, 1,024,520.7, 1,182,131.1, 1,156,682.7

- Other expense (line 28):
  - 2017: 12,502.5
  - 2018: 12,123.0
  - 2019: 20,220.5
  - 2020: 16,396.7
  - (repeated) 12,502.5, 12,123.0, 20,220.5, 16,396.7

- Gross operating balance (GOB) (1-2+23+NOBz):
  - 2017: 5,692,893.2
  - 2018: 4,926,328.8
  - 2019: 5,069,697.0
  - 2020: 2,260,134.0
  - (repeated) 5,562,869.8, 5,995,775.6, 5,093,217.0, 2,260,134.0

### Transactions in nonfinancial assets (selected)
- Acquisition of Nonfinancial Assets (31A / Fixed assets 311A):
  - 2017: 13,073,860.0
  - 2018: 12,803,168.0
  - 2019: 10,076,371.9
  - 2020: 11,122,555.5
  - (repeated) 13,073,860.0, 12,803,168.0, 10,076,371.9, 11,122,555.5

- Disposal of Nonfinancial Assets (31B / Fixed assets 311B):
  - 2017: 60,413.2
  - 2018: 302,194.8
  - 2019: 257,278.2
  - 2020: 1,090.5
  - (repeated) 60,413.2, 302,194.8, 257,278.2, 1,090.5

- Net Acquisition of Nonfinancial Assets (31):
  - 2017: 13,013,446.7
  - 2018: 12,500,973.2
  - 2019: 9,819,093.7
  - 2020: 11,061,465.0
  - (repeated) 13,013,446.7, 12,500,973.2, 9,819,093.7, 11,061,465.0

### Net lending / borrowing (NLB) and financing
- Net lending / borrowing (NLB) (1-2+NOBz-31):
  - 2017: -7,320,553.6
  - 2018: -7,574,644.4
  - 2019: -4,749,396.7
  - 2020: -8,801,330.9
  - (repeated) -7,450,577.0, -6,505,197.7, -4,725,876.7, -8,801,330.9

- Net acquisition of financial assets (32):
  - 2017: 1,249,915.5
  - 2018: -2,587,392.7
  - 2019: -1,392,040.0
  - 2020: -2,863,614.1
  - (repeated) 1,249,915.5, -2,587,392.7, 395,240.6, -1,401,196.1

- Net incurrence of liabilities (33):
  - 2017: 8,516,962.4
  - 2018: 3,702,843.4
  - 2019: 4,262,354.5
  - 2020: 6,528,617.4
  - (repeated) 8,516,962.4, 3,702,843.4, 4,262,354.5, 6,528,617.4

- Financing Discrepancy (A): {Difference between net lending/borrowing and financing (1-2-31=32-33-NLBz=0)}
  - 2017: 53,506.7
  - 2018: 1,284,408.3
  - 2019: -904,997.9
  - 2020: -590,900.6
  - (repeated) 183,530.1, 214,961.6, 858,762.8, 871,517.4

### Nominal GDP (Lao data) and fiscal data discrepancies
- Nominal GDP (B):
  - 2017: 140,749,000.0
  - 2018: 152,414,000.0
  - 2019: 164,017,000.0
  - 2020: 177,780,000.0
  - (repeated) 140,749,000.0, 152,414,000.0, 164,017,000.0, 177,780,000.0

- Fiscal data discrepancies (in term of GDP) ((A)/(B)):
  - 2017: 0.0%
  - 2018: 0.8%
  - 2019: -0.6%
  - 2020: -0.3%
  - (repeated) 0.1%, 0.1%, 0.5%, 0.5%

---

### Appendix IV: Annual GFS for budgetary central government (Aligned with disbursement data during the complimentary period) — Selected projections (Billion kips)

### Aggregate projections: FY2021–FY2025 (Plan / Projection)
- I. Total Revenue (1 + 2 + 3 + 4)
  - 2021: 27,629
  - 2022: 29,423
  - 2023: 33,884
  - 2024: 40,515
  - 2025: 48,048
  - Total 2021 - 2025: 179,500

- 1. Domestic revenue (ກ + ຂ)
  - 2021: 24,872
  - 2022: 26,963
  - 2023: 31,384
  - 2024: 37,985
  - 2025: 45,548
  - Total 2021 - 2025: 166,753

  - ກ Tax Revenue
    - 2021: 20,925
    - 2022: 23,284
    - 2023: 27,043
    - 2024: 33,194
    - 2025: 40,330
    - Total: 144,776

  - ຂ Non tax revenue
    - 2021: 3,947
    - 2022: 3,679
    - 2023: 4,341
    - 2024: 4,791
    - 2025: 5,218
    - Total: 21,977

- 2. Grants
  - 2021: 2,420
  - 2022: 2,460
  - 2023: 2,500
  - 2024: 2,530
  - 2025: 2,500
  - Total: 12,410

- 3. Social contributions
  - 2021–2025: - (zero / not applicable in table)

- 4. From Audit
  - 2021: 337
  - 2022–2025: 337 (listed once as 337)

- II. Total expenditures (A + ງ ຫຼ ື 5 + 6)
  - 2021: 31,583
  - 2022: 33,713
  - 2023: 35,881
  - 2024: 41,681
  - 2025: 47,142
  - Total 2021 - 2025: 190,000

- 5. Current expenditures
  - 2021: 21,277
  - 2022: 23,013
  - 2023: 24,741
  - 2024: 29,021
  - 2025: 32,448
  - Total: 130,500

- 6. Capital Expenditure (ຄ + ງ)
  - 2021: 10,306
  - 2022: 10,700
  - 2023: 11,140
  - 2024: 12,660
  - 2025: 14,694
  - Total: 59,500

  - ຄ Domestics
    - 2021: 3,900
    - 2022: 3,950
    - 2023: 4,000
    - 2024: 4,900
    - 2025: 6,200
    - Total: 22,950

  - ງ Foreign
    - 2021: 6,406
    - 2022: 6,750
    - 2023: 7,140
    - 2024: 7,760
    - 2025: 8,494
    - Total: 36,550

    - Project loans
      - 2021: 3,986
      - 2022: 4,290
      - 2023: 4,640
      - 2024: 5,230
      - 2025: 5,994
      - Total: 24,140

    - Project grants
      - 2021: 720
      - 2022: 730
      - 2023: 740
      - 2024: 750
      - 2025: 740
      - Total: 3,680

    - Non-project grants
      - 2021: 1,700
      - 2022: 1,730
      - 2023: 1,760
      - 2024: 1,780
      - 2025: 1,760
      - Total: 8,730

- III. Balances (I. - II.)
  - 2021: -3,954
  - 2022: -4,290
  - 2023: -1,997
  - 2024: -1,166
  - 2025: 906
  - Total 2021 - 2025: -10,500

### Ratios to GDP (percent of GDP) — FY2021–FY2025 projections
- I. Total Revenue (1 + 2 + 3)
  - 2021: 15.1%
  - 2022: 15.0%
  - 2023: 16.2%
  - 2024: 18.0%
  - 2025: 19.8%
  - Total 2021 - 2025: 17.0%

- 1. Domestic revenue (ກ + ຂ)
  - 2021: 13.6%
  - 2022: 13.8%
  - 2023: 15.0%
  - 2024: 16.8%
  - 2025: 18.8%
  - Total: 15.8%

  - ກ Tax Revenue
    - 2021: 11.5%
    - 2022: 11.9%
    - 2023: 12.9%
    - 2024: 14.7%
    - 2025: 16.6%
    - Total: 13.7%

  - ຂ Non tax revenue
    - 2021: 2.2%
    - 2022: 1.9%
    - 2023: 2.1%
    - 2024: 2.1%
    - 2025: 2.1%
    - Total: 2.1%

- 2. Grants
  - 2021: 1.3%
  - 2022: 1.3%
  - 2023: 1.2%
  - 2024: 1.1%
  - 2025: 1.0%
  - Total: 1.2%

- 3. Social contributions
  - 2021–2025: 0.0%

- II. Total expenditures (A + ງ ຫຼ ື 5 + 6)
  - 2021: 17.3%
  - 2022: 17.2%
  - 2023: 17.1%
  - 2024: 18.5%
  - 2025: 19.4%
  - Total: 18.0%

- 4. Current expenditures
  - 2021: 11.7%
  - 2022: 11.7%
  - 2023: 11.8%
  - 2024: 12.9%
  - 2025: 13.4%
  - Total: 12.3%

- 5. Capital Expenditure (ຄ + ງ)
  - 2021: 5.6%
  - 2022: 5.5%
  - 2023: 5.3%
  - 2024: 5.6%
  - 2025: 6.1%
  - Total: 5.6%

  - ຄ Domestics
    - 2021: 2.1%
    - 2022: 2.0%
    - 2023: 1.9%
    - 2024: 2.2%
    - 2025: 2.6%
    - Total: 2.2%

  - ງ Foreign
    - 2021: 3.5%
    - 2022: 3.4%
    - 2023: 3.4%
    - 2024: 3.4%
    - 2025: 3.5%
    - Total: 3.5%

- III. Balances (I. - II.)
  - 2021: -2.17%
  - 2022: -2.2%
  - 2023: -1.0%
  - 2024: -0.5%
  - 2025: 0.4%
  - Total 2021 - 2025: -1.0%

### GDP (ຕື້ກີບ) projections (Billion kips)
- 2021: 182,603
- 2022: 195,961
- 2023: 209,781
- 2024: 225,584
- 2025: 242,763
- Total 2021 - 2025: 1,056,692

---

### Appendix V: 5-Year Budget Plan (FY2021–FY2025)
- Title entry: "Appendix V. 5-Year Budget Plan (FY2021-FY2025) in Lao PDR"

*Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1laoea2022001.pdf*

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_Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1laoea2022001.pdf_