Laos Economic Outlook
July 21, 2020
The coronavirus pandemic and associated containment measures likely took a considerable toll on the economy in the first half of the year, hitting the tourism, transport and services sectors. The health crisis also seemingly dealt a blow to the job market in H1, exacerbating poverty. In better news, the country keeps lifting restrictions, supported by favorable health conditions as no new cases of Covid-19 were reported for over three months. That said, rising dengue cases pose potential downside risks to the recovery ahead. On the political front, at the beginning of July the government announced it will push ahead with a hydropower project on the Mekong River as part of the administration’s investment push in the hydropower and infrastructure sectors. The announcement raised concerns from neighboring countries due to its impact on fisheries and farming downstream.Laos Economic Growth
This year, growth is set to slow sharply as the strict lockdown restrains domestic activity, hitting investment and household spending, further weakened by sustained job shedding. Downside risks to the outlook include the high proportion of public debt denominated in foreign currency and held by foreigners, as well as the sizable current account deficit. FocusEconomics Consensus Forecast panelists project GDP to expand 1.6% in 2020, which is unchanged from last month’s forecast, and 6.3% in 2021.Laos Economy Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Population (million) | 6.7 | 6.8 | 7.0 | 7.1 | 7.2 |
| GDP per capita (USD) | 2,135 | 2,309 | 2,424 | 2,542 | 2,527 |
| GDP (USD bn) | 14.4 | 15.8 | 16.9 | 18.0 | 18.1 |
| Economic Growth (GDP, annual variation in %) | 7.3 | 7.0 | 6.9 | 6.3 | 4.8 |
| Fiscal Balance (% of GDP) | -5.6 | -5.1 | -5.5 | -4.7 | -5.2 |
| Public Debt (% of GDP) | 53.1 | 54.2 | 55.8 | 57.4 | 60.6 |
| Inflation Rate (CPI, annual variation in %) | 1.3 | 1.6 | 0.8 | 2.0 | 3.3 |
| Policy Interest Rate (%) | 5.63 | 5.31 | 5.00 | 5.00 | - |
| Exchange Rate (vs USD) | 8,122 | 8,161 | 8,196 | 8,313 | 8,561 |
| Exchange Rate (vs USD, aop) | 8,135 | 8,133 | 8,254 | 8,415 | 8,714 |
| 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) | 3.7 | 4.2 | 4.9 | 5.3 | 5.8 |
| Imports (USD billion) | 5.7 | 5.4 | 5.7 | 6.2 | 6.3 |
| Exports (annual variation in %) | 11.5 | 16.2 | 14.8 | 8.7 | 8.9 |
| Imports (annual variation in %) | 14.1 | -5.3 | 5.5 | 8.8 | 1.4 |
| International Reserves (USD) | 1.1 | 0.9 | 1.1 | 0.9 | 1.1 |
| External Debt (% of GDP) | 80.9 | 85.6 | 86.9 | 86.8 | - |
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Laos Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 8,885 | 0.31 % | Jan 01 |
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