Laos Economy: from the All Country Info reference guide to country facts

Laos Economy

Laos Economy: A summary of information about Laos Economy, from government research data as well as independent research and other sources.

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Laos: Economy

Economy - overview
The government of Laos - one of the few remaining
official communist states - began decentralizing control and
encouraging private enterprise in 1986. The results, starting from an
extremely low base, were striking - growth averaged 7% in 1988-96.
Since mid-1996, however, reform efforts have slowed, and the economy
has suffered as a result. Because Laos depends heavily on its trade
with Thailand, it was further damaged by the regional financial crisis
beginning in 1997. From June 1997 to June 1999 the Lao kip lost 87%,
and reached a crisis point in September 1999 when it fluctuated
wildly, falling from 3,500 kip to the dollar to 9,000 kip to the
dollar in a matter of weeks. Now that the currency has stabilized,
however, the government seems content to let the current situation
persist, despite 140% inflation in 1999 and limited foreign exchange
reserves. A landlocked country with a primitive infrastructure, Laos
has no railroads, a rudimentary road system, and limited external and
internal telecommunications. Electricity is available in only a few
urban areas. Subsistence agriculture accounts for half of GDP and
provides 80% of total employment. For the foreseeable future the
economy will continue to depend on aid from the IMF and other
international sources; Japan is currently the largest bilateral aid
donor; aid from the former USSR/Eastern Europe has been cut sharply.
As in many developing countries, deforestation and soil erosion will
hamper efforts to attain a high rate of GDP growth.
GDP
purchasing power parity - $7 billion (1999 est.)
GDP - real growth rate
5.2% (1999 est.)
GDP - per capita
purchasing power parity - $1,300 (1999 est.)
GDP - composition by sector
agriculture: 51%
industry: 22%
services: 27% (1999 est.)
Population below poverty line
46.1% (1993 est.)
Household income or consumption by percentage share
lowest 10%: 4.2%
highest 10%: 26.4% (1992)
Inflation rate (consumer prices)
140% (1999 est.)
Labor force
1 million - 1.5 million
Labor force - by occupation
agriculture 80% (1997 est.)
Unemployment rate
5.7% (1997 est.)
Budget
revenues: $202.7 million
expenditures: $385.1 million, including capital expenditures of $NA
(FY97/98 est.)
Industries
tin and gypsum mining, timber, electric power,
agricultural processing, construction, garments
Industrial production growth rate
7.5% (1999 est.)
Electricity - production
1.34 billion kWh (1998)
Electricity - production by source
fossil fuel: 2.99%
hydro: 97.01%
nuclear: 0%
other: 0% (1998)
Electricity - consumption
514 million kWh (1998)
Electricity - exports
782 million kWh (1998)
Electricity - imports
50 million kWh (1998)
Agriculture - products
sweet potatoes, vegetables, corn, coffee,
sugarcane, tobacco, cotton; tea, peanuts, rice; water buffalo, pigs,
cattle, poultry
Exports
$271 million (f.o.b., 1999 est.)
Exports - commodities
wood products, garments, electricity, coffee,
tin
Exports - partners
Vietnam, Thailand, Germany, France, Belgium
Imports
$497 million (f.o.b., 1999 est.)
Imports - commodities
machinery and equipment, vehicles, fuel
Imports - partners
Thailand, Japan, Vietnam, China, Singapore, Hong
Kong
Debt - external
$2.32 billion (1997 est.)
Economic aid - recipient
$345 million (1999 est.)
Currency
1 new kip (NK) = 100 at
Exchange rates
new kips (NK) per US$1 - 7,674.00 (January
2000),7,102.03 (1999), 3,298.33 (1998), 1,259.98 (1997), 921.02
(1996), 804.69 (1995)
note: as of September 1995, a floating exchange rate policy was
adopted
Fiscal year
1 October - 30 September
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