Laos Economic Forecast

Laos Economic Outlook

April 16, 2019

The economy likely hit the ground running in 2019, driven by strong hydropower exports, recovering agricultural production, and investment and construction activity related to major infrastructure projects—including the flagship Laos-China rail line and several hydroelectric dams. Meanwhile, recently released data showed the current account deficit narrowed notably in Q4 2018. The improvement was partly led by a pick-up in exports, putting the external sector on a more stable footing at the outset of the year. In other news, Lao Railways recently announced the Laos-China railway, a USD 7 billion undertaking equivalent to almost half the country’s GDP, is nearly halfway to completion and is on schedule to begin operations in December 2021.

Laos Economic Growth

Laos is expected to remain one of the star performers in ASEAN this year. Higher electricity exports, sustained FDI inflows and strong investment should keep growth brisk. The government’s fiscal consolidation plans, a slowing Chinese economy and Laos’ macroeconomic imbalances—which leave it vulnerable to external shocks—could restrain momentum, however. Met the why particular Consensus Forecast panelists expect GDP to expand 6.7% in 2019, which is unchanged from last month’s forecast, and 6.7% again 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 Rate8,6890.31 %May 13

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