Lao Pdr 

Lao Pdr country policy

Policy established 12 November 2009

• Off cover
• Private buyers: SIF facility, FX generating buyers only

Country class: 7

Lao Pdr country facts

Atradius DSB Economic Research
Country Report last updated :  19 October 2009
Country :  LAOS

Political Situation
Fairly Stable One Party State

Head of state
President Choummaly Sayasone (since 2006), PM Bouasone Bouphavanh (since 2006).

Form of government
Council of ministers appointed by the president, approved by the National Assembly.

Member of
UN, IMF, World Bank, ASEAN, AsDB, Francophonie

Internal Economic Situation
Decelerating Growth

General situation
Communist plan economy. Very slow economic reforms. The Lao economy is rather isolated and largely consists of subsistence agriculture and state-owned enterprises. The country is landlocked, transport is complicated by its many rivers and lack of infrastructure. Low educations levels and low urbanisation are other impediments to economic development. Public finance is to a large extend dependant on development aid and concessional borrowing.  Export sectors are mining (copper & gold), tourism (Luang Prabang), hydropower and coffee. Laos’ textile industry is not competitive. The severe contraction of the Thai economy has an impact on Laos’ external sector, while the global recession will decelerate growth in the tourism sector.  

External Economic Situation
Weak

Main sources of foreign exchange
Copper, gold, timber, garments, electricity, coffee, tin.

Main foreign markets
Thailand (33%), Vietnam (14%), EU (12%), China (6%)

Main expenses of foreign exchange
Machinery and equipment, vehicles, fuel.

Balance of payments 
Large current account deficits largely due to import related to investment in mining and hydropower. Net FDI inflows also related to these projects.