Laos Economic Forecast

Laos Economic Outlook

November 16, 2021

After a challenging first half of the year, with a spike in Covid-19 cases from late April leading to the imposition of tougher restrictions, the economy continues to face headwinds in H2. The health situation deteriorated further in early July, forcing authorities to extend restrictions and to enforce stricter measures in the capital, Vientiane. The measures, which were tightened on 31 August, have remained in place well into Q4 amid stubbornly high daily Covid-19 cases. That said, an order by the prime minister to make preparations for the reopening of the economy may signal the easing of restrictions before the launch of the China-Laos railway, which is scheduled for December. In other news, a report showing an outflow of USD 303 million worth of foreign currency—roughly one fifth of the country’s initial reserves—in Q1–Q3 this year bodes ill for the external sector.

Laos Economic Growth

The economy should gain steam in 2022, with the establishment of the China-Laos railway set to bring travelers from abroad and provide an additional platform for exports. On top of this, recovering global demand should further propel activity. However, a possible prolongation of the health crisis into next year poses a key downside risk. FocusEconomics Consensus Forecast panelists project GDP to expand 5.5% in 2022, which is unchanged from last month’s forecast, and 5.6% in 2023.

Laos Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (USD)2,1352,3092,4242,5422,527
GDP (USD bn)14.415.816.918.018.1
Economic Growth (GDP, annual variation in %)
Fiscal Balance (% of GDP)-5.6-5.1-5.5-4.7-5.2
Public Debt (% of GDP)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)5.635.315.005.00-  
Exchange Rate (vs USD)8,1228,1618,1968,3138,561
Exchange Rate (vs USD, aop)8,1358,1338,2548,4158,714
Current Account (% of GDP)-15.8-8.8-7.5-8.0-4.7
Current Account Balance (USD bn)-2.3-1.4-1.3-1.4-0.9
Trade Balance (USD billion)-2.0-1.1-0.8-0.9-0.5
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)11.516.
Imports (annual variation in %)14.1-
International Reserves (USD)
External Debt (% of GDP)80.985.686.986.8-  

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Laos Facts

Value Change Date
Exchange Rate8,8850.31 %Jan 01

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