Laos Economic Forecast

Laos Economic Outlook

April 26, 2022

Activity was likely robust in Q1. Year-on-year export growth picked up compared to Q4, according to Ministry of Commerce figures. Despite being held up by China’s zero-Covid policy, the China-Laos railway appears to have boosted freight between the two countries. Moreover, Covid-19 restrictions were loosened in January–February. That said, rising energy prices caused the oil-related import bill to swell and inflation to hit a near-decade high in March, likely denting consumer spending. Meanwhile, the government presented its five-year budget in late March, proposing a gradual shrinking of the fiscal deficit. Turning to Q2, activity is likely to be restrained: a Covid-19 surge forced the government to tighten restrictions from late March and a slowdown in China will hit exports. More positively, a major Covid-19 vaccine booster shot rollout recently began, which should support activity going forward.

Laos Economic Growth

Activity should pick-up in 2022, with the China-Laos railway—once initial hitches are ironed out—boosting tourism and goods exports. Meanwhile, recovering global demand should further propel activity. However, a possible worsening of the public health situation, the elevated external debt burden, rising inflation and currency depreciation are key downside risks. FocusEconomics Consensus Forecast panelists project GDP to expand 4.6% in 2022, which is down 0.2 percentage points from last month’s forecast, and 4.9% in 2023.

Laos Economy Data

2015 2016 2017 2018 2019
Population (million)6.76.87.07.17.2
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 %)7.37.06.96.34.8
Fiscal Balance (% of GDP)-5.6-5.1-5.5-4.7-5.2
Public Debt (% of GDP)53.154.255.857.460.6
Inflation Rate (CPI, annual variation in %)1.31.60.82.03.3
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)3.74.24.95.35.8
Imports (USD billion)5.75.45.76.26.3
Exports (annual variation in %)11.516.214.88.78.9
Imports (annual variation in %)14.1-5.35.58.81.4
International Reserves (USD)1.10.91.10.91.1
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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