Laos Economic Forecast

Laos Economic Outlook

June 21, 2022

Economic activity likely fared well in H1 2022 thanks to a robust external sector. According to the Ministry of Commerce figures, year-on-year export growth picked up in Q1 compared to Q4 2021. The China-Laos railway—operating since December 2021—has led to increased freight traffic between the two countries. That said, China’s zero-Covid policy has weighed on Laos’ agricultural exports. Meanwhile, the country is experiencing a fuel crisis, with prices soaring amid severe shortages. This is denting both private spending and business activity. The government has responded by cutting excise taxes on petrol, but this will increase pressure on the public finances. In other news, on 9 May Laos reopened fully for vaccinated travelers, providing a much-needed respite to the tourism industry.

Laos Economic Growth

In 2022, GDP should grow faster than in 2021, albeit slower than the regional average. The China-Laos railway will support trade, while looser Covid-19 restrictions will boost spending, especially via tourism and remittances from migrant workers in Thailand. Commodity price volatility, a slowdown among trading partners—especially China—and high inflation pose downside risks. FocusEconomics Consensus Forecast panelists project GDP to expand 3.8% in 2022, which is down 0.4 percentage points from last month’s forecast, and 4.6% 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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