Laos Economic Forecast

Laos Economic Outlook

October 19, 2021

Activity hit some obstacles in the first half of the year: The health crisis deteriorated in late April, with a spike in daily Covid-19 cases provoking a widespread imposition of tougher restrictions, which will have dented the domestic economy. However, merchandise exports were considerably up in annual terms throughout H1. Moving on to Q3, the health situation deteriorated in early July, forcing authorities to extend restrictions and to enforce stricter measures in the capital, Vientiane. The measures, which were tightened on 31 August, will have weighed on momentum throughout the quarter. Similar dynamics have carried over into Q4, with the imposition of a lockdown in the capital city from 30 September boding ill for activity. That said, the completion of the China-Laos railway—set to open on 2 December—could provide some relief to the economy in the final stretch of the year.

Laos Economic Growth

After sluggish growth this year, the economy should pick up steam in 2022, with the opening of the China-Laos railway set to benefit tourism and trade. On top of this, recovering global demand should further propel activity. However, the possible spillover of the health crisis into next year poses a key downside risk. FocusEconomics Consensus Forecast panelists project GDP to expand 5.5% in 2022, which is down 0.6 percentage points from last month’s forecast, and 5.8% 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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