Editing Economy of Laos

{{Short description|None}}
{{Use dmy dates|date=January 2024}}
{{use American English|date=April 2017}}
{{Infobox economy
| country = Laos
| image = Vientiane_Patouxai_Laos.jpg
| image_size = 310px
| caption = [[Vientiane]]
| currency = [[Lao Kip]] (LAK, ₭)
| fixed exchange = 
| year = 1 October – 30 September
| organs = {{hlist|[[ASEAN]]|[[WTO]]|[[Regional Comprehensive Economic Partnership|RCEP]]|[[Group of 77|G77]]}}
| group = {{plainlist|
*[[Developing country|Least developed]]<ref>{{cite web |url=https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/weoselco.aspx?g=2200&sg=All+countries+%2f+Emerging+market+and+developing+economies |title=World Economic Outlook Database, April 2019 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=29 September 2019}}</ref>
*Lower-middle income economy<ref>{{cite web |url=https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups |title=World Bank Country and Lending Groups |publisher=[[World Bank]] |website=datahelpdesk.worldbank.org |access-date=29 September 2019}}</ref>}}
| population = {{decrease}} 7,847,644 (2025)<ref>{{cite web |url=https://data.worldbank.org/indicator/SP.POP.TOTL?locations=LA |title=Population, total - Laos |access-date=24 December 2022}}</ref>
| gdp = {{plainlist|
*{{Increase}} $16.32 billion ([[nominal GDP|nominal]], 2025 est.)<ref name="IMFWEOLAO">{{cite web |url=https://www.imf.org/en/Publications/WEO/weo-database/2025/april/weo-report?c=544,&s=NGDP_RPCH,NGDPD,PPPGDP,NGDPDPC,PPPPC,&sy=2024&ey=2030&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 |title=World Economic Outlook Database, April 2025 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=May 18, 2025}}</ref>
*{{increase}} $78.85 billion ([[purchasing power parity|PPP]], 2025 est.)<ref name="IMFWEOLAO"/>}}
| gdp rank = {{plainlist|
*[[List of countries by GDP (nominal)|138th (nominal, 2025 est.)]]
*[[List of countries by GDP (PPP)|108th (PPP, 2025 est.)]]}}
| growth = {{plainlist|
*6.3%&nbsp;(2018) 4.7%&nbsp;(2019e)
*1.0%&nbsp;(2020f) 4.6%&nbsp;(2021f)<ref>{{cite book |title=Global Economic Prospects, June 2020 |page=74 |url=https://openknowledge.worldbank.org/handle/10986/33748 |website=openknowledge.worldbank.org |date=8 June 2020 |publisher=[[World Bank]] |doi=10.1596/978-1-4648-1553-9 |isbn=978-1-4648-1553-9 |access-date=10 June 2020}}</ref>}}
| per capita = {{plainlist|
*{{Increase}} $2,096 (nominal, 2025 est.)<ref name="IMFWEOLA">{{cite web |url=https://www.imf.org/en/Publications/WEO/weo-database/2025/april/weo-report?c=544,&s=NGDP_RPCH,NGDPD,PPPGDP,NGDPDPC,PPPPC,&sy=2024&ey=2030&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1|title=World Economic Outlook Database, April 2025 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=April 18, 2025}}</ref>
*{{increase}} $10,125 (PPP, 2025 est.)<ref name="IMFWEOLA"/>}}
| per capita rank = {{plainlist|
*[[List of countries by GDP (nominal) per capita|150th (nominal, 2025 est.)]]
*[[List of countries by GDP (PPP) per capita|126th (PPP, 2025 est.)]]}}
| components = 
| sectors = {{plainlist|
*[[Primary sector]]: 20.9%  
*[[Secondary sector]]: 33.2%
*[[Tertiary sector]]: 45.9% 
*(2017 est.)<ref name="CIAWFLA">{{cite web |url=https://www.cia.gov/the-world-factbook/countries/laos/ |title=The World Factbook |publisher=[[Central Intelligence Agency]] |website=CIA.gov |access-date=19 June 2019}}</ref>}}
| inflation = 40.3% (Jan 2023 est.)<ref name="IMFWEOLA"/>
| poverty = {{plainlist|
*22% (2013 est.)<ref name="CIAWFLA"/>
*58.7% on less than $3.20/day (2012)<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.LMIC?locations=LA |title=Poverty headcount ratio at $3.20 a day (2011 PPP) (% of population) |publisher=[[World Bank]] |website=data.worldbank.org |access-date=14 September 2019}}</ref>}}
| gini = 36.4 {{color|darkorange|medium}} (2012)<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.GINI?locations=LA |title=GINI index (World Bank estimate) |publisher=[[World Bank]] |website=data.worldbank.org |access-date=19 June 2019}}</ref>
| hdi = {{plainlist|
*{{increase}} 0.604 {{color|darkorange|medium}} (2018)<ref>{{cite web |url=http://hdr.undp.org/en/indicators/137506 |title=Human Development Index (HDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=11 December 2019}}</ref> ([[List of countries by Human Development Index|140th]])
*0.454 {{color|red|low}} [[List of countries by inequality-adjusted HDI|IHDI]] (2018)<ref>{{cite web |url=http://hdr.undp.org/en/content/table-3-inequality-adjusted-human-development-index-ihdi |title=Inequality-adjusted Human Development Index (IHDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=11 December 2019}}</ref>}}
| labor = {{plainlist|
*{{increase}} 3,800,051 (2019)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=LA |title=Labor force, total - Lao PDR |publisher=[[World Bank]] |website=data.worldbank.org |access-date=9 January 2020}}</ref>
*36.9% employment rate (2017)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.EMP.TOTL.SP.NE.ZS?locations=LA |title=Employment to population ratio, 15+, total (%) (national estimate) |publisher=[[World Bank]] |website=data.worldbank.org |access-date=14 September 2019}}</ref>}}
| occupations = {{plainlist|
*[[Primary sector of the economy|agriculture]]: 73.1% 
*[[Secondary sector of the economy|industry]]: 6.1%
*[[Tertiary sector of the economy|services]]: 20.6% 
*(2012 est.)<ref name="CIAWFLA"/>}}
| unemployment = 9.4% (2017)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.UEM.TOTL.NE.ZS?locations=LA |title=Unemployment, total (% of total labor force) (national estimate) – Lao PDR |publisher=World Bank |website=openknowledge.worldbank.org |access-date=9 January 2020}}</ref>
| edbr = {{steady}} [[Ease of doing business index#Ranking|154th (below average, 2020)]]<ref name="World Bank and International Financial Corporation">{{cite web |url=http://www.doingbusiness.org/data/exploreeconomies/lao-pdr |title=Ease of Doing Business in Lao PDR |publisher=Doingbusiness.org |access-date=19 June 2019}}</ref>
| industries = [[Copper]], [[tin]], [[gold]], and [[gypsum]] mining; [[timber]], [[electric power]], [[agricultural]] processing, [[rubber]] [[construction]], [[garment]]s, [[cement]] and [[tourism]]
| exports = {{increase}} $3.654 billion (2017 est.)<ref name="CIAWFLA"/>
| export-goods = [[wood]] products, [[electricity]], [[coffee]], [[tin]], [[copper]], [[gold]] and [[cassava]]
| export-partners = {{plainlist|
*{{flag|Thailand}} 35.2%
*{{flag|China}} 29.2%
*{{flag|Vietnam}} 10.4% (2022)<ref name="OECExport">{{cite web |title=Export Partners of Laos |url=https://oec.world/en/visualize/tree_map/hs92/export/lao/show/all/2022/ |publisher=[[The Observatory of Economic Complexity]] |access-date=20 March 2024}}</ref>}}
| imports = {{increase}} $4.976 billion (2017 est.)<ref name="CIAWFLA"/>
| import-goods = machinery and equipment, vehicles, fuel, consumer goods
| import-partners = {{plainlist|
*{{flag|Thailand}} 52.3%
*{{flag|China}} 21.4%
*{{flag|Vietnam}} 8.9% (2022)<ref name="OECImport">{{cite web |title=Import Partners of Laos |url=https://oec.world/en/visualize/tree_map/hs92/import/lao/show/all/2022/ |publisher=[[The Observatory of Economic Complexity]] |access-date=20 March 2024}}</ref>}}
| current account = {{increase}} −$2.057 billion (2017 est.)<ref name="CIAWFLA"/>
| FDI = {{increase}} $15.14 billion (31 December 2012 est.)<ref name="CIAWFLA"/>
| gross external debt = {{increaseNegative}} $17.16 billion (2020 est)<ref>{{Cite web |title=World Bank |url=https://datatopics.worldbank.org/debt/ids/country/lao |access-date=21 April 2022 |website=datatopics.worldbank.org}}</ref>
| debt = {{increaseNegative}} 63.6% of GDP (2017 est.)<ref name="CIAWFLA"/>
| revenue = 3.099 billion (2017 est.)<ref name="CIAWFLA"/>
| expenses = 4.038 billion (2017 est.)<ref name="CIAWFLA"/>
| balance = −5.5% (of GDP) (2017 est.)<ref name="CIAWFLA"/>
| aid = $0.4 billion (1999 est.)
| credit = 
| reserves = {{increase}} $1.27 billion (31 December 2017 est.)<ref name="CIAWFLA"/>
| cianame = laos
| spelling = US
}}

The '''economy of Laos''' is a lower-middle income [[developing economy]]. Being a communist state, the Lao economic model bears some resemblance to the Chinese and Vietnamese economies, in that it has implemented market-based economic practices while maintaining a degree of state control and welcoming [[foreign direct investment]].<ref>{{cite web |url= https://www.export.gov/article?series=a0pt0000000PAuEAAW&type=Country_Commercial__kav|title= Laos - Market Overview|author=<!--Not stated--> |date= 15 July 2019 |website= Export.gov |access-date= 25 September 2019 |quote= Laos is one of the world's five remaining communist countries. The Lao economic model bears some resemblance to its Chinese and Vietnamese counterparts, in that it has implemented market-based economic practices while maintaining a high degree of state control and welcoming foreign direct investment (FDI). Laos is politically stable.}}</ref><ref>{{cite web |url= https://www.constituteproject.org/constitution/Laos_2003.pdf?lang=en|title= Chapter II: The Socio-Economic Regime|author=<!--Not stated--> |date= 2003|website= Constitute|access-date= 25 September 2019|quote= All types of enterprises are equal before the laws and operate according to the principle of the market economy, competing and cooperating with each other to expand production and business while regulated by the State in the direction of socialism.}}</ref>

Following the [[Laotian Civil War|Civil War]], [[Laos]] established a Soviet-type [[planned economy]]. As part of economic restructuring that aimed to integrate Laos into the [[Globalization|globalized world market]], the country underwent reforms called the "New Economic Mechanism" in 1986 that decentralized government control and encouraged private enterprise alongside state-owned enterprises.<ref>[https://www.cia.gov/the-world-factbook/countries/laos/ "Laos"].</ref> As of 2007, Laos averaged 8% a year in GDP growth.<ref>{{Cite web|url=https://www.cia.gov/library/publications/the-world-factbook/rankorder/2003rank.html#la|archive-url=https://web.archive.org/web/20070613004530/https://www.cia.gov/library/publications/the-world-factbook/rankorder/2003rank.html#la|url-status=dead|archive-date=13 June 2007|title=The World Factbook — Central Intelligence Agency|website=www.cia.gov|access-date=11 February 2017}}</ref> It was forecasted that Laos would sustain at least 7% growth through 2019.<ref>{{Cite web|url=https://newsletters.briefs.bloomberg.com/document/3hz20cux57czgimnux/qampa-asia-frontier-capital|title=Bloomberg Briefs|website=newsletters.briefs.bloomberg.com|access-date=11 February 2017}}</ref>

The key goals for the government included pursuing poverty reduction and education for all children, with an initiative to become a "land-linked" country. This was showcased through the construction of the nearly $6 billion [[Kunming–Singapore railway#In Laos|high-speed rail from Kunming, China to Vientiane, Laos]]. The country opened a stock exchange, the [[Lao Securities Exchange]], in 2011, and has become a regional player in its role as a hydroelectric power supplier to its neighbors China, Thailand, and Vietnam. The Lao economy relies on [[Foreign direct investment]] to attract capital from overseas. The long-term goal of the Lao economy, as enshrined in the constitution, is economic development in the direction of [[socialism]].<ref>{{cite web |url= https://www.constituteproject.org/constitution/Laos_2003.pdf?lang=en|title= Preamble|author=<!--Not stated--> |date= 2003|website= Constitute|access-date= 25 September 2019|quote= During [the years] since the country has been liberated, our people have together been implementing the two strategic tasks of defending and building the country, especially the undertaking of reforms in order to mobilise the resources in the nation to preserve the people's democratic regime and create conditions to move towards socialism.}}</ref>

Laos has hydropower resources; the country has potential for hydro- and solar power.<ref>{{cite journal |last1=Vakulchuk |first1=Roman |last2=Kresnawan |first2=Muhammad Rizki |last3=Merdekawati |first3=Monika |last4=Overland |first4=Indra |last5=Sagbakken |first5=Haakon Fossum |last6=Suryadi |first6=Beni |last7=Yurnaidi |first7=Zulfikar |title=Lao PDR: How to Attract More Investment in Small-Scale Renewable Energy? |date=2020 |doi=10.13140/RG.2.2.31192.72966 }}</ref> Excess electricity from hydropower is exported to other countries. The country relies on coal in its electricity production.<ref>{{cite journal |last1=Overland |first1=Indra |last2=Sagbakken |first2=Haakon Fossum |last3=Chan |first3=Hoy-Yen |last4=Merdekawati |first4=Monika |last5=Suryadi |first5=Beni |last6=Utama |first6=Nuki Agya |last7=Vakulchuk |first7=Roman |title=The ASEAN climate and energy paradox |journal=Energy and Climate Change |date=December 2021 |volume=2 |pages=100019 |doi=10.1016/j.egycc.2020.100019 |hdl=11250/2734506 |doi-access=free |hdl-access=free }}</ref>

==History==
Seizure of power by the Communists resulted in the withdrawal of mainly American external investment, on which the country had become dependent as a result of the destruction of domestic capital during the Indochina Wars.<ref>{{cite book|author=Baten, Jörg |title=A History of the Global Economy. From 1500 to the Present.|date=2016|publisher=Cambridge University Press|page=297|isbn=9781107507180}}</ref>

With the [[revolutions of 1989]] in [[Eastern Europe]] and [[Dissolution of the Soviet Union|the Soviet Union]], in 1991, the PDR Lao government reached an agreement with the [[World Bank]] and the [[International Monetary Fund]] on reforms. The government agreed to introduce fiscal and monetary reform, promote private enterprise and [[foreign direct investment|foreign investment]], privatize or close state firms, and strengthen banking. It agreed to maintain a market exchange rate, reduce tariffs, and eliminate unneeded trade regulations. A liberal foreign investment code was enacted. Enforcement of intellectual property rights is governed by 2 Prime Minister's Decrees dating from 1995 and 2002.<ref>[https://web.archive.org/web/20080222225404/http://www.ecap-project.org/how_to_enforce_your_ipr/laos.html Laos]</ref>

The economy continues to be dominated by an agricultural sector operating largely outside the money economy and in which the public sector continues to play a dominant role. A number of private enterprises have been founded in industries such as [https://web.archive.org/web/20100803012556/http://www.laohandicraftgroup.laopdr.com/ handicrafts], [[Beerlao|beer]], [http://www.daoheuangcoffee.com/ coffee] and {{usurped|1=[https://web.archive.org/web/20010124180700/http://www.laohotelgroup.org/ tourism]}}. With [[United Nations Industrial Development Organization|United Nations]], [[Japan International Cooperation Agency|Japanese]], and [[Deutsche Gesellschaft für Internationale Zusammenarbeit|German]] support, a formerly state-controlled [[chamber of commerce]] aims to promote private business: the [http://www.laocci.com/ Lao National Chamber of Commerce and Industry] and its provincial subdivisions.<ref>[http://8km.de/category/laos 8km.de, LNCCI]</ref>

A round of state-owned enterprise reform in 2019 aims to ensure that the remaining SOEs become profitable ventures that are efficient and sustainable sources of income for the national treasury. These measures include closing unproductive enterprises, ensure businesses in which the state has investments are reformed into profitable ventures, and reduce corruption. As of 2019, the State-Owned Enterprise Development and Insurance Department of the Lao government has 183 enterprises under its supervision.<ref>{{cite web |author=<!--Not stated--> |date=8 January 2019 |title=Laos to set state-owned enterprises on path to profitability |url=http://annx.asianews.network/content/laos-set-state-owned-enterprises-path-profitability-89378 |url-status=dead |archive-url=https://web.archive.org/web/20200804141042/https://annx.asianews.network/content/laos-set-state-owned-enterprises-path-profitability-89378 |archive-date=4 August 2020 |access-date=25 September 2019 |website=Asia News Network }}</ref>

Laos faced an economic crisis in 2022. Caused by the [[COVID-19 pandemic in Laos|COVID-19 pandemic]] and [[external debt]] primarily from China, it escalated into [[inflation]] and a [[debt crisis]], bringing the country to the brink of [[Default (finance)|default]].<ref>{{Cite web |title=Laos economic crisis intensifies amid massive debt – DW – 08/09/2022 |url=https://www.dw.com/en/laos-economic-crisis-intensifies-amid-massive-chinese-debt/a-62758725 |access-date=1 November 2022 |website=dw.com |language=en}}</ref> A World Bank report finds that the economic instability "largely results from low revenue and accumulated debt. There is moreover a need to improve the efficiency of public expenditure and tackle the potential costs of state-owned enterprises and public-private partnerships.” The [[Lao kip]] currency value has fallen and inflation remains higher than before the pandemic. The same World Bank report states that "the main factor in the kip’s falling value has been the lack of foreign currency available (...) a result of the need to repay large external debts, despite some deferrals, and limited capital inflows." The per capita GDP of Laos has gone down from $2,595 in 2021 to $1,824 in 2023 because of the kip’s depreciation.<ref>{{Cite web |date=November 2023 |title=Lao Economic Monitor, November 2023: Fiscal Policy for Stability - Key Findings |url=https://www.worldbank.org/en/country/lao/publication/lao-economic-monitor-november-2023-fiscal-policy-for-stability-key-findings |url-status=live |archive-url=https://archive.today/20231221123315/https://www.worldbank.org/en/country/lao/publication/lao-economic-monitor-november-2023-fiscal-policy-for-stability-key-findings |archive-date=21 December 2023 |access-date=21 December 2023 |website=World Bank |language=en}}</ref><ref>{{Cite web |date=18 December 2023 |title=Laos' Economic Woes Will Continue In 2024 |url=https://thediplomat.com/2023/12/laos-economic-woes-will-continue-in-2024/ |url-status=live |archive-url=https://archive.today/20231221061925/https://thediplomat.com/2023/12/laos-economic-woes-will-continue-in-2024/ |archive-date=21 December 2023 |access-date=21 December 2023 |website=The Diplomat |language=en-US}}</ref><ref>{{Cite news |date=8 October 2023 |title='I feel hopeless': Living in Laos on the brink |language=en-GB |url=https://www.bbc.com/news/world-asia-66924300 |access-date=21 December 2023}}</ref>

==Agriculture==
{{main|Agriculture in Laos}}
{{see also|Rice production in Laos}}

In 2012, the Laos government issued a 4-year moratorium for new mining projects. The reasons cited were environmental and social concerns relating to the use of agricultural land.<ref name=ref2013022605/>

In 2019 Laos produced:<ref name=":0">[http://www.fao.org/faostat/en/#data/QC/ Lao production in 2019, by FAO]</ref>
*3.4 million tons of [[rice]];
*3.1 million tons of roots and tubers;
*2.2 million tons of [[cassava]];
*1.9 million tons of [[sugarcane]];
*1.5 million tons of [[vegetable]];
*1.0 million tons of [[banana]];
*717 thousand tons of [[maize]];
*196 thousand tons of [[watermelon]];
*165 thousand tons of [[coffee]];
*154 thousand tons of [[taro]];
*114 thousand tons of [[sweet potato]];
*56 thousand tons of [[tobacco]];
*53 thousand tons of [[peanut]];
*46 thousand tons of [[Orange (fruit)|orange]];
*43 thousand tons of [[pineapple]];
*23 thousand tons of [[papaya]];
*8.6 thousand tons of [[tea]];

In addition to smaller productions of other agricultural products.<ref name=":0" />

==Tourism==
{{Main|Tourism in Laos}}

As of 2011, tourism was the fastest-growing industry in the Lao economy. The government opened Laos to the world in the 1990s.<ref name="NZ_Herald_10698587">{{cite news |url=http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10698587 |title=Stray-ing into Laos |author=Slade, Maria |date=9 January 2011 |work=[[The New Zealand Herald]] |access-date=11 September 2011}}</ref>

==Other statistics==
Of the total foreign investment in Laos in 2012, the mining industry got 27% followed by electricity generation which had a 25% share.<ref name=ref2013022605>{{Cite news | title=Vietnam leads investment in Laos | publisher=Investvine.com | date=26 February 2013 | url=http://investvine.com/vietnam-leads-investment-in-laos | access-date=3 April 2013 | archive-date=26 March 2013 | archive-url=https://web.archive.org/web/20130326043801/http://investvine.com/vietnam-leads-investment-in-laos/ | url-status=dead }}</ref>

==References==
{{reflist}}
{{reflist|group=note}}

==External links==
{{commons category}}
*[https://web.archive.org/web/20060927031340/http://nafri.org.la/05_news/news/IRRI/15_years_of_Research.htm Rice research in Lao PDR]
*[http://www.sdc.org.vn/index.php?navID=21483&langID=1 Rice Biodiversity in Lao PDR ] {{Webarchive|url=https://web.archive.org/web/20061014115903/http://www.sdc.org.vn/index.php?navID=21483&langID=1 |date=14 October 2006 }}

{{Asia in topic|Economy of}}
{{Laos topics}}

{{DEFAULTSORT:Economy Of Laos}}
[[Category:Economy of Laos]]