Laos Economic Forecast

Laos Economic Outlook

October 15, 2019

Growth likely remains solid, supported by the construction of the flagship Laos-China railway, which is reportedly nearly 80% complete. Moreover, the start of operations at the Nam Ngiep hydropower plant in September bodes well for the energy sector. On the external front, exports were up slightly over 9% in H1, which, coupled with limited import growth, led the trade deficit to fall. Less positively, however, credit growth slowed considerably in the year to August compared to the 2018 average, notably in the agriculture, retail and service sectors, which will have impacted domestic activity somewhat. In addition, economic vulnerabilities are sizeable, given low international reserves—which have remained below USD 1 billion so far this year—and large external public debt.

Laos Economic Growth

Economic growth should be broadly steady next year, supported by ongoing investment in the Laos-China railway and electricity exports. However, fiscal austerity could dampen activity somewhat. A shaky external position, fairly high public debt and significant exposure to China pose downside risks to the outlook. FocusEconomics Consensus Forecast panelists expect GDP to expand 6.5% in 2020, which is down 0.1 percentage points from last month’s forecast, and 6.6% in 2021.

Laos Economy Data

Population (million)
GDP per capita (USD)1,8952,0752,2172,4002,523
GDP (USD bn)11.913.314.415.816.9
Economic Growth (GDP, annual variation in %)
Fiscal Balance (% of GDP)-4.8-3.9-2.3-4.6-5.6
Public Debt (% of GDP)54.356.556.056.4-  
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
Exchange Rate (vs USD)7,9388,0358,1228,1618,196
Exchange Rate (vs USD, aop)7,8398,0488,1358,1338,254
Current Account (% of GDP)-7.9-14.5-15.8-8.8-7.5
Current Account Balance (USD bn)-0.9-1.9-2.3-1.4-1.3
Trade Balance (USD billion)-0.8-1.7-2.0-1.1-0.8
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)3.344.711.516.214.8
Imports (annual variation in %)
International Reserves (USD)
External Debt (% of GDP)68.672.781.185.686.0

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Laos Facts

Exchange Rate8,7950.31 %Sep 04

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