Laos



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Laos Economy 2008


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 in 1988-2007 except during the short-lived drop caused by the Asian financial crisis beginning in 1997. Despite this high growth rate, Laos remains a country with a underdeveloped infrastructure, particularly in rural areas. It has no railroads, a rudimentary road system, and limited external and internal telecommunications, though the government is sponsoring major improvements in the road system with support from Japan and China. Electricity is available in urban areas and in most rural districts. Subsistence agriculture, dominated by rice, accounts for about 40% of GDP and provides 80% of total employment. The economy will continue to benefit from aid from international donors and from foreign investment in hydropower and mining. Construction will be another strong economic driver, especially as hydroelectric dam and road projects gain steam. Several policy changes since 2004 may help spur growth. In late 2004, Laos gained Normal Trade Relations status with the US, allowing Laos-based producers to benefit from lower tariffs on exports. Laos is taking steps to join the World Trade Organization in the next few years; the resulting trade policy reforms will improve the business environment. On the fiscal side, a value-added tax (VAT) regime, slated to begin in 2008, should help streamline the government's inefficient tax system.
GDP (purchasing power parity): $12.8 billion (2007 est.)
GDP (official exchange rate): $4.028 billion (2007 est.)
GDP - real growth rate: 7.5% (2007 est.)
GDP - per capita (PPP): $2,000 (2007 est.)
GDP - composition by sector: agriculture: 40.9% industry: 33.2% services: 25.9% (2007 est.)
Labor force: 2.1 million (2006 est.)
Labor force - by occupation: agriculture: 80% industry and services: 20% (2005 est.)
Unemployment rate: 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)
Budget: revenues: $473.1 million expenditures: $647.2 million (2007 est.)
Inflation rate (consumer prices): 4.5% (2007 est.)
Central bank discount rate: 12.67% (31 December 2007)
Commercial bank prime lending rate: 28.5% (31 December 2007)
Stock of money: $327.9 million (31 December 2007)
Stock of quasi money: $717.9 million (31 December 2007)
Stock of domestic credit: $285.8 million (31 December 2007)
Agriculture - products: sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; water buffalo, pigs, cattle, poultry
Industries: copper, tin, gold, and gypsum mining; timber, electric power, agricultural processing, construction, garments, tourism, cement
Industrial production growth rate: 12% (2007 est.)
Electricity - production: 1.639 billion kWh (2006 est.)
Electricity - consumption: 1.344 billion kWh (2006 est.)
Electricity - exports: 547 million kWh (2006 est.)
Electricity - imports: 367 million kWh (2006 est.)
Oil - production: 0 bbl/day (2007 est.)
Oil - consumption: 2,996 bbl/day (2006 est.)
Oil - exports: 0 bbl/day (2005)
Oil - imports: 3,036 bbl/day (2005)
Oil - proved reserves: 0 bbl (1 January 2006 est.)
Natural gas - production: 0 cu m (2007 est.)
Natural gas - consumption: 0 cu m (2007 est.)
Natural gas - exports: 0 cu m (2007 est.)
Natural gas - imports: 0 cu m (2007 est.)
Natural gas - proved reserves: 0 cu m (1 January 2006 est.)
Current account balance: -$285 million (2007 est.)
Exports: $970 million (2007 est.)
Exports - commodities: wood products, coffee, electricity, tin, copper, gold
Exports - partners: Thailand 32.7%, Vietnam 14.3%, China 5.9%, South Korea 4.8% (2007)
Imports: $1.378 billion f.o.b. (2007 est.)
Imports - commodities: machinery and equipment, vehicles, fuel, consumer goods
Imports - partners: Thailand 68.5%, China 9.3%, Vietnam 5.5% (2007)
Reserves of foreign exchange and gold: $540 million (31 December 2007 est.)
Debt - external: $3.179 billion (2006)
Currency (code): kip (LAK)
Exchange rates: kips (LAK) per US dollar - 9,658 (2007), 10,235 (2006), 10,820 (2005), 10,585.5 (2004), 10,569 (2003)

NOTE: The economy information regarding Laos on this page is re-published from the 2008 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Laos Economy 2008 information contained here. All suggestions for corrections of any errors about Laos Economy 2008 should be addressed to the CIA.