Laos Economic Forecast

Laos Economic Outlook

October 20, 2020

The pandemic and its related restrictions likely took their toll on the economy in the first three quarters of the year. Despite the low number of reported local cases, travel restrictions at home and abroad seemingly dealt a severe blow to the important tourism industry, in turn weighing on employment and increasing the poverty rate. Moreover, the pandemic seems to have derailed the government’s fiscal consolidation efforts, due to dwindling revenues and spiking countercyclical spending. Against this backdrop, on 23 September Fitch Ratings downgraded Laos’ rating to “CCC” from “B-”, signaling a substantial credit risk, mainly due to worsening external liquidity problems. More positively, in late September the government received EUR 26.5 million for development from the German government, while in early October it eased restrictions in a bid to attract tourists and stir activity in Q4.

Laos Economic Growth

In 2021, the economy should regain steam as the effects of Covid-19 recede and the global economy reopens, and as the domestic economy strengthens. That said, an increasing probability of default and the risk of flare-ups of the virus cloud the outlook. FocusEconomics Consensus Forecast panelists project GDP to expand 5.9% in 2021, which is up 0.1 percentage points from last month’s forecast, and 6.6% 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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