Economy - overview

The government of Laos, one of the few remaining one-party Communist states, began decentralizing control and encouraging private enterprise in 1986. The results, starting from an extremely low base, were striking - growth averaged 6% per year from 1988-2008 except during the short-lived drop caused by the Asian financial crisis that began in 1997. Despite this high growth rate, Laos remains a country with an underdeveloped infrastructure, particularly in rural areas. It has a rudimentary, but improving, road system, and limited external and internal telecommunications.
China has signed a deal with the Lao to build a high speed rail system in the country. Construction on the $7 billion project is slated to begin in April 2011 and will take five years. Electricity is available in urban areas and in many rural districts. Subsistence agriculture, dominated by rice cultivation in lowland areas, accounts for about 30% of GDP and provides 80% of total employment. The government in FY09/10 received $586 million from international donors. Economic growth has reduced official poverty rates from 46% in 1992 to 26% in 2010. The economy has benefited from high foreign investment in hydropower, mining, and construction. Laos gained Normal Trade Relations status with the US in 2004, and is taking steps required to join the World Trade Organization, such as reforming import licensing. Related trade policy reforms will improve the business environment. On the fiscal side, Laos initiated a VAT tax system in 2010. Simplified investment procedures and expanded bank credits for small farmers and small entrepreneurs will improve Lao's economic prospects. The government appears committed to raising the country's profile among investors. The World Bank has declared that Laos's goal of graduating from the UN Development Program's list of least-developed countries by 2020 is achievable. According Laotian officials, the 7th Socio-Economic Development Plan for 2011-15 will outline efforts to achieve Millennium Development Goals.

GDP (purchasing power parity)

$15.68 billion (2010 est.)
$14.55 billion (2009 est.)
$13.53 billion (2008 est.)
note: data are in 2010 US dollars

GDP (official exchange rate)

$6.341 billion (2010 est.)

GDP - real growth rate

7.8% (2010 est.)
7.5% (2009 est.)
7.2% (2008 est.)

GDP - per capita (PPP)

$2,400 (2010 est.)
$2,300 (2009 est.)
$2,200 (2008 est.)
note: data are in 2010 US dollars

GDP - composition by sector

agriculture: 29.8%
industry: 31.7%
services: 38.5% (2010 est.)

Population below poverty line

26% (2010 est.)

Labor force

3.69 million (2010 est.)

Labor force - by occupation

agriculture: 75.1%
industry and services: 20% (2010 est.)

Unemployment rate

2.5% (2009 est.)
2.4% (2005 est.)

Household income or consumption by percentage share

lowest 10%: 3.4%
highest 10%: 28.5% (2002)

Distribution of family income - Gini index

34.6 (2002)
37 (1997)

Budget

revenues: $1.137 billion
expenditures: $1.328 billion (2010 est.)

Inflation rate (consumer prices)

6% (2010 est.)
0% (2009 est.)

Central bank discount rate

4.3% (31 December 2010)
4% (31 December 2009)

Commercial bank prime lending rate

26% (31 December 2010)
11% (30 November 2009)

Stock of domestic credit

$1.562 billion (31 December 2010 est.)
$1.095 billion (31 December 2009 est.)

Industries

copper, tin, gold, and gypsum mining; timber, electric power, agricultural processing, construction, garments, cement, tourism

Industrial production growth rate

17.7% (2010 est.)

Electricity - production

1.553 billion kWh (2010 est.)

Electricity - consumption

2.23 billion kWh (2010 est.)

Electricity - exports

341 million kWh (2010 est.)

Electricity - imports

999 million kWh (2010 est.)

Oil - production

0 bbl/day (2009 est.)

Oil - consumption

1,918 bbl/day (2010 est.)

Oil - imports

1,918 bbl/day (2010 est.)

Oil - exports

0 bbl/day (2007 est.)

Oil - proved reserves

NA bbl (1 January 2010 est.)

Natural gas - production

0 cu m (2008 est.)

Natural gas - consumption

0 cu m (2008 est.)

Natural gas - exports

0 cu m (2008 est.)

Natural gas - imports

0 cu m (2008 est.)

Natural gas - proved reserves

0 cu m (1 January 2010 est.)

Current Account Balance

-$195 million (2010 est.)
-$395 million (2009 est.)

Agriculture - products

sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; water buffalo, pigs, cattle, poultry

Exports

$1.95 billion (2010 est.)
$1.147 billion (2009 est.)

Exports - commodities

wood products, coffee, electricity, tin, copper, gold

Exports - partners

Thailand 29.18%, China 15.04%, Vietnam 14.96%, UK 4.29% (2009)

Imports

$1.504 billion (2010 est.)
$1.308 billion (2009 est.)

Imports - commodities

machinery and equipment, vehicles, fuel, consumer goods

Imports - partners

Thailand 66.2%, China 11.45%, Vietnam 5.3% (2009)

Reserves of foreign exchange and gold

$756 million (31 December 2010 est.)
$712.4 million (31 December 2009 est.)

Debt - external

$5.797 billion (2010 est.)
$5.548 billion (2009 est.)

Exchange rates

kips (LAK) per US dollar - 8,320.27 (2010), 8,516.04 (2009), 8,760.69 (2008), 9,658 (2007), 10,235 (2006)