Laos Economy - 2006

Economy - overview:
The government of Laos, one of the few remaining official Communist states, began decentralizing control and encouraging private enterprise in 1986. The results, starting from an extremely low base, were striking - growth averaged 6% in 1988-2004 except during the short-lived drop caused by the Asian financial crisis beginning in 1997. Despite this high growth rate, Laos remains a country with a primitive infrastructure. It has no railroads, a rudimentary road system, and limited external and internal telecommunications, though the government is sponsoring major improvements in the road system with possible support from Japan. Electricity is available in only a few urban areas. Subsistence agriculture, dominated by rice, accounts for about half of GDP and provides 80% of total employment. The economy will continue to benefit from aid by the IMF and other international sources and from new foreign investment in food processing and mining. Construction will be another strong economic driver, especially as hydroelectric dam and road projects gain steam. In late 2004, Laos gained Normal Trade Relations status with the US, allowing Laos-based producers to face lower tariffs on exports. This new status may help spur growth. In addition, the European Union has agreed to provide $1 million to the Lao Government for technical assistance in preparations for WTO membership. If the avian flu worsens and spreads in the region, however, prospects for tourism could dim.

GDP (purchasing power parity):
$11.92 billion (2005 est.)

GDP (official exchange rate):
$2.541 billion (2005 est.)

GDP - real growth rate:
7.2% (2005 est.)

GDP - per capita (PPP):
$1,900 (2005 est.)

GDP - composition by sector:
agriculture: 48.6%
industry: 25.9%
services: 25.5% (2005 est.)

Labor force:
2.8 million (2002 est.)

Labor force - by occupation:
agriculture: 80%
industry and services: 20% (1997 est.)

Unemployment rate:
5.7% (1997 est.)

Population below poverty line:
40% (2002 est.)

Household income or consumption by percentage share:
lowest 10%: 3.2%
highest 10%: 30.6% (1997)

Distribution of family income - Gini index:
37 (1997)

Inflation rate (consumer prices):
9.4% (2005 est.)

Budget:
revenues: $319.3 million
expenditures: $434.6 million; including capital expenditures of $NA (2005 est.)

Agriculture - products:
sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; water buffalo, pigs, cattle, poultry

Industries:
copper, tin, and gypsum mining; timber, electric power, agricultural processing, construction, garments, tourism, cement

Industrial production growth rate:
13% (2005 est.)

Electricity - production:
3.767 billion kWh (2003)

Electricity - consumption:
3.298 billion kWh (2003)

Electricity - exports:
435 million kWh (2003)

Electricity - imports:
230 million kWh (2003)

Oil - production:
0 bbl/day (2003 est.)

Oil - consumption:
2,950 bbl/day (2003 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Natural gas - production:
0 cu m (2003 est.)

Natural gas - consumption:
0 cu m (2003 est.)

Current account balance:
-$58.35 million (2005 est.)

Exports:
$379 million (2005 est.)

Exports - commodities:
garments, wood products, coffee, electricity, tin

Exports - partners:
Thailand 19.3%, Vietnam 13.4%, France 8%, Germany 5.3%, UK 5% (2004)

Imports:
$541 million f.o.b. (2005 est.)

Imports - commodities:
machinery and equipment, vehicles, fuel, consumer goods

Imports - partners:
Thailand 60.5%, China 10.3%, Vietnam 7.1%, Singapore 4% (2004)

Reserves of foreign exchange and gold:
$217 million (August 2005)

Debt - external:
$2.49 billion (2001)

Economic aid - recipient:
$243 million (2001 est.)

Currency (code):
kip (LAK)

Exchange rates:
kips per US dollar - 10,820 (2005), 10,585.5 (2004), 10,569 (2003), 10,056.3 (2002), 8,954.6 (2001)