Economy of Laos

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Economy of Laos

Vientiane
Currency	Lao Kip (LAK, ₭)
Fiscal year	1 October – 30 September
Trade organizations	ASEAN WTO RCEP G77
Country group	Developing/Emerging[1] Lower-middle income economy[2]
Statistics
Population	7,425,057 (2021)[3]
GDP	$14.244 billion (nominal, 2023 est.)[4] $74.205 billion (PPP, 2023 est.)[4]
GDP rank	144th (nominal, 2023) 107th (PPP, 2023)
GDP growth	6.3% (2018) 4.7% (2019e) 1.0% (2020f) 4.6% (2021f)[5]
GDP per capita	$1,879 (nominal, 2023 est.)[6] $9,787 (PPP, 2023 est.)[6]
GDP per capita rank	152nd (nominal, 2023) 126th (PPP, 2023)
GDP by sector	Primary sector: 20.9% Secondary sector: 33.2% Tertiary sector: 45.9% (2017 est.)[7]
Inflation (CPI)	40.3% (Jan 2023 est.)[6]
Population below poverty line	22% (2013 est.)[7] 58.7% on less than $3.20/day (2012)[8]
Gini coefficient	36.4 medium (2012)[9]
Human Development Index	0.604 medium (2018)[10] (140th) 0.454 low IHDI (2018)[11]
Labor force	3,800,051 (2019)[12] 36.9% employment rate (2017)[13]
Labor force by occupation	agriculture: 73.1% industry: 6.1% services: 20.6% (2012 est.)[7]
Unemployment	9.4% (2017)[14]
Main industries	Copper, tin, gold, and gypsum mining; timber, electric power, agricultural processing, rubber construction, garments, cement and tourism
External
Exports	$3.654 billion (2017 est.)[7]
Export goods	wood products, electricity, coffee, tin, copper, gold and cassava
Main export partners	Thailand 35.2%  China 29.2%  Vietnam 10.4% (2022)[15]
Imports	$4.976 billion (2017 est.)[7]
Import goods	machinery and equipment, vehicles, fuel, consumer goods
Main import partners	Thailand 52.3%  China 21.4%  Vietnam 8.9% (2022)[16]
FDI stock	$15.14 billion (31 December 2012 est.)[7]
Current account	−$2.057 billion (2017 est.)[7]
Gross external debt	$17.16 billion (2020 est)[17]
Public finances
Government debt	63.6% of GDP (2017 est.)[7]
Budget balance	−5.5% (of GDP) (2017 est.)[7]
Revenues	3.099 billion (2017 est.)[7]
Expenses	4.038 billion (2017 est.)[7]
Economic aid	$0.4 billion (1999 est.)
Foreign reserves	$1.27 billion (31 December 2017 est.)[7]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars.

The economy of Laos is a lower-middle income developing economy. Being one of the socialist states (along with China, Cuba, Vietnam, and North Korea), the Lao economic model resembles the Chinese socialist market and/or Vietnamese socialist-oriented market economies by combining high degrees of state ownership with openness to foreign direct investment and private ownership in a predominantly market-based framework.^[18][19]

Following independence, Laos established a Soviet-type planned economy. As part of economic restructuring that aimed to integrate Laos into the globalized world market, the country underwent reforms called the "New Economic Mechanism" in 1986 that decentralized government control and encouraged private enterprise alongside state-owned enterprises.^[20] As of 2007, Laos ranked among the fastest-growing economies in the world, averaging 8% a year in GDP growth.^[21] It was forecasted that Laos would sustain at least 7% growth through 2019.^[22]

The key goals for the government included pursuing poverty reduction and education for all children, with an initiative to become a "land-linked" country. This was showcased through the construction of the nearly $6 billion high-speed rail from Kunming, China to Vientiane, Laos. The country opened a stock exchange, the Lao Securities Exchange, in 2011, and has become a rising regional player in its role as a hydroelectric power supplier to its neighbors China, Thailand, and Vietnam. The Lao economy relies largely on Foreign direct investment to attract capital from overseas. The long-term goal of the Lao economy, as enshrined in the constitution, is economic development in the direction of socialism.^[23]

Despite rapid growth, Laos remains one of the poorest countries in Southeast Asia.^[24][25] A landlocked country, it has inadequate infrastructure and a largely unskilled work force. Nonetheless, Laos continues to attract foreign investment as it integrates with the broader ASEAN economic community, due to its plentiful, young workforce, and favorable tax environment.

Laos has significant hydropower resources; the country also has large potential for small-scale hydro- and solar power.^[26] Excess electricity from hydropower is exported to other countries. Despite this, the country continues to also rely on coal in its electricity production.^[27]