The economy that was
once a complete socialist regime is now attempting to become a more
market oriented economy. Since 1986 Laos adopted the New Economic
Mechanism (NEM) which ensure that it is in transition to becoming
a market economy. Further, market oriented theories and principles
are even guranteed by the constitution. Prices of goods and services
are determined by market forces. The
effectiveness of some of these policies still remains to be seen.
However, since reforms in '86, the industrial sector has
expanded and as of 1995 it made up 17.5% of gross domestic product
(GDP) and the service sector, 25% (UN). Moreover with the
economic opening of the country between 1990 and 1998 the average
growth rate remained high at 6.6% and by 1998 Laos's GDP had reached
$1.3 billion.
UN Economic Data,
1999:
Real GDP Growth Rate:
6.5%
Nominal GDP:
$2,173 million
Nominal GDP Per Capita:
$410
Inflation Rate Per
Year: 30.6%
Government Expenditure:
$299 million
Budget Deficit (as
%tage of GDP): 12.2%
Exchange Rate (Parallel
buying) Kip/US$: 8,500 (as of 1999)
Gross Int'l Reserves:
$220 million
Official External
Debt: $1,368 million (as of 1997)
Official Development
Assistance Inflow: $416.5 million
Exports: $316.9
million ($US)
Imports: $647.9
million ($US)
World Bank Statistics
on Laos, 2000:
GDP: Growth Rate 5.7%
(annual growth is expected to grow at 6.6% through to 2004)
GDP: $2.1B
Exports: $544M
Imports: $636M
Total Debt Outstanding &
Disbursed: $2.5B
Asian Development Bank,
2003
GDP Growth: 5.9%
Agriculture (50+% of GDP)
expanded 8.3%
Industry grew by 14.6%,
Services contracted by 4.9%
Budget Deficit (Sept. 2003):
7.8% of GDP, 5.7% in previous yr.
Revenues declined 11%
Inflation: Avg. 15.5%, up
from 10.6% in 2002
Exports: up 23%, Imports:
up 7.2%
Current Account Deficit $51M
(or 2.5% of GDP)
Foreign Exchange (FOREX)
Reserves: up $215.5M
Foreign Direct Investment
(FDI): $19.5M
Estimated per capita income:
$300
Total External Debt: $3B
(majority owed to Russia however in June 2003, 70% of the bilateral
debt was eliminated with a remaing $380M that will be serviced over
33 years. Remaining Debt: less than 5% is commercial and the rest
are long-term loans with bi/multilateral institutions.)
Currency. Unit of currency
is the kip. In March of 2000, the currency was at 7,500
kip = $1USD.From 2003-2004, the kip has fluctuated from approximately
8,000 to 11,000 kip to the US dollar.
Additional NOTES
91% of households
(HH) have financial savings though only less than 1% deposit their
savings in banks (yr. 2000).
1997: Laos joined
as a full member to the Association of Southeast Asian Nations (ASEAN)
2004: After prolonged debate,
USA normalizes trade with Laos
Official development
aid (ODA) from other countries which in 2003-2004 stood at $500M
(Vientiane Times newspaper, 2004).
