6368162
Lao (official), French, English, various ethnic languages
VIENTIANE (capital) 997,000 (2015)
- Conventional long form
- Lao People's Democratic Republic
- Conventional short form
- Laos
- Local long form
- Sathalanalat Paxathipatai Paxaxon Lao
- Local short form
- Mueang Lao (unofficial)
communist state
- Name
- Vientiane
- Geographic coordinates
- 17 58 N, 102 36 E
- Time difference
- UTC+7 (12 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
The government of Laos, one of the few remaining one-party communist states, began decentralizing control and encouraging private enterprise in 1986. Economic growth averaged more than 6% per year in the period 1988-2008, and Laos' growth has more recently been amongst the fastest in Asia, averaging nearly 8% per year for most of the last decade. However, growth has declined over the past year and is expected to be about 6.8% in 2017, according to the IMF.
- Inflation
- 1.509%
- External debt stocks
- US$ 11,645,383,000
- Total tax rate (% of commercial profits)
- 26.2%
- Real Interest Rate
- 12.286%
- Manufacturing, value added (% of GDP)
- 8.785%
- Current Account Balance
- US$ -2,264,467,608
- Labor Force, Total
- 3,500,353
- Employment in Agriculture
- 71.30%
- Employment in Industry
- 8.30%
- Employment in Services
- 20.20%
- Unemployment Rate
- 1.48%
- Imports of goods and services
- US$ 6,219,578,124
- Exports of goods and services
- US$ 4,665,564,637
- Total Merchandise Trade
- 48.67%
- FDI, net inflows
- US$ 1,079,144,682
- Commercial Service Exports
- US$ 798,163,412
sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; cassava (manioc, tapioca), water buffalo, pigs, cattle, poultry
mining (copper, tin, gold, gypsum); timber, electric power, agricultural processing, rubber, construction, garments, cement, tourism
- Commodities
- wood products, coffee, electricity, tin, copper, gold, cassava
- Partners
- Thailand 30.4%, China 26.9%, Vietnam 17.5% (2015)
- Commodities
- machinery and equipment, vehicles, fuel, consumer goods
- Partners
- Thailand 60.9%, China 18.6%, Vietnam 7.3% (2015)
- Country Risk Rating
- D
- A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high.
- Business Climate Rating
- D
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Abundant natural resources: minerals (copper, gold, bauxite, iron, zinc), oil and agricultural raw materials (maize, rice, sugar cane, rubber, manioc, soya, coffee)
- Expansion of the hydroelectric sector
- Foreign investments in the raw materials sector
- Regional integration (ASEAN) and WTO membership
- Massive current account deficit
- Inadequate level of reserves
- Governance shortcomings and high poverty rates
- Weak banking sector
- Significant sovereign risk because of high stock of debt
In 2016, growth dipped a little and this trend is expected to continue in 2017. Activity will, however, remain very dynamic. The Laotian economy should benefit from the slight recovery in commodity prices, primarily those of mining products. Meanwhile, construction will profit from momentum in the hydroelectric sector. 35 power plants are under construction, while several projects were launched at the end of 2016. Meanwhile, despite fiscal consolidation measures, infrastructure development is continuing. The country, which is confronted by major infrastructure shortcomings, is involved in projects aimed at improving its rail connections with Thailand and China. In addition, a fifth airport is to be built and the country is expanding its hotel capacity. Accordingly, the number of tourist visitors, especially from China, is expected to remain high. The tourist source countries will continue to be highly concentrated with 80% of tourists coming from Thailand, China or Vietnam. The agricultural sector - under-modernised - will continue to dominate: it represents 25% of GDP and employs over 70% of the economically active population.
Despite the growth in exports of electricity and mining products, the current account deficit is still huge. This is because the country imports almost twice as much as it exports. Imports mainly consist of oil products and capital goods, destined, in particular, for the hydroelectric sector. Nonetheless, in 2017, the trade deficit is expected to narrow, thanks chiefly to the slight expected increase in prices for mining products and the recovery of the Thai economy. At the same time, tourism growth should help to offset dividend repatriations by foreign companies engaged in the exploitation of natural resources. The country also receives expatriate workers' remittances and foreign aid. Accordingly, it should manage to slightly reduce the level of its current account deficit.
The presence of a single party, the communist-inspired Lao People's Revolutionary Party (PPRL), ensures the country's political stability. In April 2016, the transition of power to a new leadership team led by Thongloun Sisoulith ensured continuity. However, the country remains underdeveloped, despite the strong economic growth observed in recent years. This situation is explained by the advent of an economy strongly oriented towards the external market and favouring FDIs (which enabled the country to join the WTO), which, however, offers little benefit to the population. Meanwhile, despite some progress, notable on financial data, there are significant governance shortcomings, as evidenced by the high level of corruption.