Laos Economic Forecast

Laos Economic Outlook

November 17, 2020

The pandemic and measures to contain its spread both domestically and abroad have hammered the economy this year. Despite the low number of reported local cases, the global health crisis has dealt an especially severe blow to the tourism sector, investment and exports—key sources of foreign exchange—worsening the country’s external liquidity problems and increasing credit risks. Moreover, rising countercyclical spending and falling revenue have derailed the government’s fiscal consolidation efforts. That said, large-scale development initiatives such as the China-Laos railway and other projects relating to mining and tourism continue to progress. Against this backdrop, the government reopened some local borders in late October and is intensifying its efforts to boost economic prospects and improve the business climate, including by pledging to facilitate investment from the private sector.

Laos Economic Growth

Economic growth should gather considerable steam in 2021, following this year’s sharp deceleration. The gradual reopening of the global economy, resuming tourist inflows and stronger domestic activity should fuel growth. However, the unpredictable evolution of the pandemic and substantial default risks cloud the outlook. FocusEconomics Consensus Forecast panelists project GDP to expand 5.6% in 2021, which is down 0.3 percentage points from last month’s forecast, and 6.1% in 2022.

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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