Laos Economic Forecast

Laos Economic Outlook

December 13, 2018

Solid regional growth, exports and healthy inward investment should have powered growth in H2. However, tourist arrivals have likely disappointed this year, despite a government effort to attract more visitors through the Visit Laos campaign. Moreover, recent Central Bank data shows that although goods exports jumped year-on-year in the third quarter, the current account deficit continued to widen on surging goods imports, likely linked to infrastructure projects such as the China-Laos railway. On the political front, on 5 December Laos inked a deal to export energy to Cambodia, which will support the external sector and the administration’s aims of turning Laos into a regional energy hub.

Laos Economic Growth

Growth should be solid going forward, thanks to increased power generation, ongoing FDI inflows and infrastructure investment. However, softer momentum in China could have a dampening effect, while a weak external position, global financial tightening and vulnerability to weather fluctuations pose downside risks. Met the why particular Consensus Forecast panelists expect GDP to expand 6.9% in 2019, which is unchanged from last month’s forecast, and 6.8% in 2020.

Laos Economy Data

20132014201520162017
Population (million)6.36.46.56.66.7
GDP per capita (USD)1,8952,0752,2172,110-  
GDP (USD bn)11.913.314.415.8-  
Economic Growth (GDP, annual variation in %)8.07.67.37.0-  
Fiscal Balance (% of GDP)-5.0-4.1-2.4-4.7-  
Public Debt (% of GDP)54.358.658.158.4-  
Inflation Rate (CPI, annual variation in %)6.44.11.31.60.8
Policy Interest Rate (%)6.256.255.635.315.00
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)-28.4-20.0-18.0-12.0-  
Current Account Balance (USD bn)-3.4-2.7-2.6-1.9-  
Trade Balance (USD billion)-0.8-1.6-2.5-1.4-  
Exports (USD billion)2.32.72.83.4-  
Imports (USD billion)3.14.35.24.7-  
Exports (annual variation in %)-0.317.64.021.1-  
Imports (annual variation in %)0.938.622.5-9.4-  
International Reserves (USD)0.70.91.10.91.3
External Debt (% of GDP)82.085.990.489.6-  

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Laos Facts

ValueChangeDate
Exchange Rate8,5620.31 %Jan 21

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