Laos Economic Outlook
April 26, 2022Activity was likely robust in Q1. Year-on-year export growth picked up compared to Q4, according to Ministry of Commerce figures. Despite being held up by China’s zero-Covid policy, the China-Laos railway appears to have boosted freight between the two countries. Moreover, Covid-19 restrictions were loosened in January–February. That said, rising energy prices caused the oil-related import bill to swell and inflation to hit a near-decade high in March, likely denting consumer spending. Meanwhile, the government presented its five-year budget in late March, proposing a gradual shrinking of the fiscal deficit. Turning to Q2, activity is likely to be restrained: a Covid-19 surge forced the government to tighten restrictions from late March and a slowdown in China will hit exports. More positively, a major Covid-19 vaccine booster shot rollout recently began, which should support activity going forward.
Laos Economic GrowthActivity should pick-up in 2022, with the China-Laos railway—once initial hitches are ironed out—boosting tourism and goods exports. Meanwhile, recovering global demand should further propel activity. However, a possible worsening of the public health situation, the elevated external debt burden, rising inflation and currency depreciation are key downside risks. FocusEconomics Consensus Forecast panelists project GDP to expand 4.6% in 2022, which is down 0.2 percentage points from last month’s forecast, and 4.9% in 2023.
Laos Economy Data
|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||-|
5 years of Laos economic forecasts for more than 30 economic indicators.
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|Exchange Rate||8,885||0.31 %||Jan 01|
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