Laos Economy 2008

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 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 primitive infrastructure. 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 possible support from Japan. Electricity is available in only a few urban areas. Subsistence agriculture, dominated by rice, accounts for about half of GDP and provides 80% of total employment. The economy will continue to benefit from aid by the IMF and other international sources and from new 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, would streamline the government's inefficient tax system.

GDP (purchasing power parity):
$12.61 billion (2007 est.)

GDP (official exchange rate):
$3.061 billion (2007 est.)

GDP - real growth rate:
7% (2007 est.)

GDP - per capita (PPP):
$1,900 (2007 est.)

GDP - composition by sector:
agriculture: 41.2%
industry: 32.5%
services: 26.3% (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.)

Population below poverty line:
30.7% (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)

Inflation rate (consumer prices):
5% (2007 est.)

Budget:
revenues: $470.4 million
expenditures: $643.5 million (2007 est.)

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

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

Industrial production growth rate:
12% (2007 est.)

Electricity - production:
1.715 billion kWh (2005)

Electricity - consumption:
1.193 billion kWh (2005)

Electricity - exports:
728 million kWh (2005)

Electricity - imports:
326 million kWh (2005)

Oil - production:
0 bbl/day (2005 est.)

Oil - consumption:
2,950 bbl/day (2005 est.)

Oil - exports:
0 bbl/day (2004)

Oil - imports:
2,898 bbl/day (2004)

Oil - proved reserves:
0 bbl (1 January 2006 est.)

natural gas - production:
0 cu m (2005 est.)

natural gas - consumption:
0 cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
0 cu m (2005)

natural gas - proved reserves:
0 cu m (1 January 2006 est.)

Current account balance:
-$355 million (2007 est.)

Exports:
$720.9 million (2007 est.)

Exports - commodities:
garments, wood products, coffee, electricity, tin

Exports - partners:
Thailand 41%, Vietnam 9.7%, China 4.1%, Malaysia 4% (2006)

Imports:
$1.199 billion f.o.b. (2007 est.)

Imports - partners:
Thailand 68.8%, China 11.3%, Vietnam 5.5% (2006)

Economic aid - recipient:
$379 million (2006 est.)

Reserves of foreign exchange and gold:
$513.5 million (31 December 2007 est.)

Debt - external:
$3.179 billion (2006)

Currency (code):
kip (LAK)

Exchange rates:
kips per US dollar - 9,658 (2007), 10,235 (2006), 10,820 (2005), 10,585.5 (2004), 10,569 (2003)