About Lao & Key Financial Statistics

About Laos and Key Financial Statistics

Overview of Economy:

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 from 1988-2008 except during the short-lived drop caused by the Asian financial crisis that began in 1997. Laos' growth has more recently been amongst the fastest in Asia and averaged nearly 8% per year for the last decade. Despite this high growth rate, Laos remains a country with an underdeveloped infrastructure, particularly in rural areas. It has a basic, but improving, road system, and limited external and internal land-line telecommunications. Electricity is available to 83% of the population. Laos' economy is heavily dependent on capital-intensive natural resource exports. The labor force, however, still relies on agriculture, dominated by rice cultivation in lowland areas, which accounts for about 25% of GDP and 73% of total employment. Economic growth has reduced official poverty rates from 46% in 1992 to 26% in 2010. The economy also has benefited from high-profile foreign direct investment in hydropower dams along the Mekong river, copper and gold mining, logging, and construction though some projects in these industries have drawn criticism for their environmental impacts. The strength of the natural resources and hydropower sectors have masked ongoing problems with the business environment that would have otherwise constrained growth. These problems include onerous registration requirements, a gap between legislation and implementation, and unclear or conflicting business regulations. Laos gained Normal Trade Relations status with the US in 2004 and applied for Generalized System of Preferences trade benefits in 2013 after being admitted to the World Trade Organization earlier in the year. Laos is in the process of implementing a value-added tax system. Simplified investment procedures and expanded bank credits for small farmers and small entrepreneurs will improve Laos' economic prospects. The government appears committed to raising the country's profile among foreign investors and has developed special economic zones replete with generous tax incentives, but a small labor pool of both skilled and unskilled workers remains an impediment to investment. Laos broadly appears to be on target to graduate from the UN Development Program's list of least-developed countries by 2020, and the country is preparing for implementation of the ASEAN Economic Community at the end of 2015 and for the rotating ASEAN chairmanship in 2016.

Gross Domestic Product (In USD):

$34.53 billion (2014 est.)

$32.15 billion (2013 est.)

$29.77 billion (2012 est.)

Composition of Gross Domestic Product:

% Agricuture: 23.7

% Industry: 32.2

% Services: 44.1

Composition of Labor Force by Occupation:

% Agriculture: 73.1

% Industry: 6.1