Rice fields in Laos

Laos Economic Forecast

Laos Economic Outlook

Economic momentum was likely weak in 2022 as several factors exerted downward pressure on activity. Floods and significantly weaker annual export growth in Q1–Q3 were a drag on output. Moreover, surging commodity prices and a sharp FX depreciation led to a cost-of-living crisis—inflation ended last year at 39.3%. Additionally, the pressure on growth was likely intensified by the Central Bank’s policy tightening in Q4. However, the economy will have been supported by the lifting of Covid-19 restrictions, increased electricity exports, reviving tourism and an increase in both freight and passenger transportation through the Laos-China railway. Turning to Q1 of this year, early signs are downbeat as inflation continued to accelerate, reaching 40.3% in January and boding poorly for business activity. In politics, the recent cabinet reshuffle is unlikely to bring major policy changes.

Laos Inflation

Inflation accelerated to 40.3% in January (December: 39.3%). Despite remaining in double-digit territory, price pressures are projected to approximately halve this year. A slightly stronger kip should also keep a lid on prices. Upside risks revolve around China’s reopening and its impact on commodity prices.

Laos Economic Data

2017 2018 2019 2020 2021
Population (million) 7.0 7.1 7.2 7.3 7.4
GDP (USD bn) 17.1 18.1 18.7 19.0 18.8
GDP per capita (USD) 2 2 2 2 2
GDP (LAK bn) 140 152 162 171 182
Economic Growth (Nominal GDP, ann. var. %) 8.9 8.3 6.7 5.6 6.3
Economic Growth (GDP, ann. var. %) 6.9 6.2 5.5 0.5 2.5
Fiscal Balance (% of GDP) -5.5 -4.7 -3.3 -5.6 -3.6
Public Debt (% of GDP) 57.2 59.7 62.0 82.7 -
Money (ann. var. of M2 %) 12.2 8.4 18.9 16.3 24.0
Inflation (CPI, ann. var. %, aop) 0.8 2.0 3.3 5.1 3.8
Exchange Rate (LAK per USD, eop) 8.00 8.00 8.00 9.00 11.00
Exchange Rate (LAK per USD, aop) 8.00 8.00 8.00 9.00 9.00
Current Account Balance (USD bn) -1.3 -1.6 -1.3 -0.2 0.4
Current Account Balance (% of GDP) -7.4 -9.1 -7.0 -1.2 2.4
Merchandise Trade Balance (USD bn) -0.8 -0.9 -0.5 0.7 1.4
Merchandise Exports (USD bn) 4.9 5.4 5.8 6.1 7.7
Merchandise Imports (USD bn) 5.7 6.3 6.3 5.4 6.3
Merchandise Exports (ann. var. %) 14.8 11.0 7.4 5.3 25.8
Merchandise Imports (ann. var. %) 5.5 11.4 -0.7 -14.4 16.8
Foreign Direct Investment (USD bn) 1.7 1.4 0.8 1.0 1.1
International Reserves (USD bn) 1 1 1 1 1
International Reserves (months of imports) 2.4 1.9 2.1 3.1 2.8
External Debt (USD bn) 14.7 15.5 16.6 17.4 17.2
External Debt (% of GDP) 86.1 85.6 88.4 91.8 91.3

Free Sample Report

Interested in Laos economic reports, analysis and data? FocusEconomics provides data, forecasts and analysis for hundreds of countries and commodities. Request your free sample report now.

Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest