Economic Outline

flag Laos Laos: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Laos is a rather poor country compared to its neighbours but has experienced very strong growth in recent years (averaging just below 8% in the last decade, driven by the exploitation of its mining and hydroelectric resources), placing the country among the fastest-growing economies in the world. Nevertheless, Laos’ economy was severely affected by the global crisis caused by the COVID-19 pandemic, with GDP growth turning negative in 2020 (-0.4%). In 2021 and 2022, the recovery was constrained by skyrocketing prices (consumer price inflation’s annual growth reached 30% in August 2022, marking a 20-year high) and supply bottlenecks, with GDP growth hovering around 2.2%. As a robust demand for electricity and copper should drive exports, the IMF expects Laos’ economy to accelerate to 3.1% in 2023 and 3.7% the following year.

The country’s public finances are somehow fragile, and the debt-to-GDP ratio went up to 107.1% in 2022, from 93.5% one year earlier and 61.6% before the pandemic (IMF). Almost half the debt is held by China, which has taken part in the country’s major investment projects, and is mostly denominated in USD, increasing the value of debt service due to the depreciation of the local currency. According to Coface, foreign currency public debt service (interest and principal) over the 2022-2026 period should average USD 1.3 billion annually, which was the amount of the country’s total foreign reserves in end-June 2022. Therefore, national authorities have been negotiating the postponement of debt payments with some creditors, enabling Laos to relax its borrowing plans. According to government figures from December 2022, the 2022 budget deficit was expected to shrink to 979 billion kips (0.51% of GDP). Meanwhile, revenues amounted to more than 1,981 billion kips, exceeding the target figure for 2022 by 6.27%. The average inflation rate spiked to 15% in 2022 amid high energy and food prices and is expected to decrease only marginally in 2023 (to 9%) before it returns around its pre-pandemic level in 2024 (4% - IMF). Mega infrastructure projects are expected to contribute to economic growth in the upcoming years, with projects such as the Luang Prabang dam, the Vientiane-Boten high-speed train line, and the USD 2 billion investments of the Laos Transmission Company Ltd to improve power transmission lines to neighbouring countries. The construction of various highways and rail lines linking up with the Chinese border is also expected to highlight the "land-linked" status of the country. The Lao People's Revolutionary Party is the only allowed party in the country and has been governing since 1975. It has a Marxist–Leninist ideology and controls most of the political and economic aspects of the society, with no real organized opposition.

According to the World Bank, Laos is part of the lower tier of the 'middle-income countries' despite the fact that around 18.33% of the population continues to live below the poverty line. The level of education is low and the living conditions in rural areas (home to almost 65% of the active population) are precarious. Inequalities with the urban zones are widening, also. Unemployment in the country was estimated at around 3.6% of the total labour force in 2021 (World Bank, latest data available): although no reliable official figures are available, the ILO estimates that the share of informal employment in the country is among the highest in the world. The country’s GDP per capita (PPP) was estimated at USD 9,166 in 2022 by the IMF.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 15.3014.2414.1014.8715.82
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 2,0471,8791,8341,9092,005
General Government Gross Debt (in % of GDP) 128.5121.7118.8114.7111.1
Inflation Rate (%) n/a28.
Current Account (billions USD) -0.91-0.37-0.86-1.15-1.32
Current Account (in % of GDP) -6.0-2.6-6.1-7.7-8.3

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data

Monetary Indicators 20162017201820192020
Lao Kip (LAK) - Average Annual Exchange Rate For 1 MUR 228.72242.20250.17253.22229.90

Source: World Bank - Latest available data.


Main Sectors of Industry

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 58.1 10.8 31.1
Value Added (in % of GDP) 14.6 33.6 41.2
Value Added (Annual % Change) 1.6 3.3 2.5

Source: World Bank - Latest available data.


The Active Population in Figures

Labour Force 3,719,7703,793,0163,828,776

Source: International Labour Organization, ILOSTAT database

Total activity rate 81.33%81.34%81.38%
Men activity rate 82.19%82.21%82.27%
Women activity rate 80.47%80.46%80.49%

Source: International Labour Organization, ILOSTAT database


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.


Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Not Free
Political Freedom:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

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Sources of General Economic Information

Useful Resources
Ministry of Finance
Ministry of Planning and Investment
Lao National Chamber of Commerce and Industry
Bank of the Lao PDR (BOL)

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Latest Update: November 2023