Economy - overview The government of Laos - one of the few remaining official communist states - has been decentralizing control and encouraging private enterprise since 1986. The results, starting from an extremely low base, have been striking - growth averaged 7% in 1988-96. Because Laos depends heavily on its trade with Thailand, it fell victim to the financial crisis in the region in 1997, when growth was a mere 1.5%. Laos is a landlocked country with a primitive infrastructure. It has no railroads, a rudimentary road system, and limited external and internal telecommunications. Electricity is available in only a few urban areas. Subsistence agriculture accounts for half of GDP and provides 80% of total employment. The predominant crop is glutinous rice. In non-drought years, Laos is self-sufficient overall in food, but each year flood, pests, and localized drought cause shortages in various parts of the country. For the foreseeable future the economy will continue to depend on aid from the IMF and other international sources; Japan is currently the largest bilateral aid donor; aid from the former USSR/Eastern Europe has been cut sharply. As in many developing countries, deforestation and soil erosion will hamper efforts to regain a high rate of GDP growth.

GDP purchasing power parity - $5.9 billion (1997 est.)

GDP - real growth rate 1.5% (1997 est.)

GDP - per capita purchasing power parity - $1,150 (1997 est.)

GDP - composition by sector
agriculture: 56%
industry: 19%
services: 25% (1997 est.)

Inflation rate - consumer price index 16% (1997 est.)

Labor force 1 million-1.5 million
by occupation: agriculture 80% (1997 est.)

Unemployment rate 1.7% overall; 4.5% in urban areas (1995 est.)

Budget
revenues: $230.2 million
expenditures: $365.9 million, including capital expenditures of $317 million (1996)

Industries tin and gypsum mining, timber, electric power, agricultural processing, construction, garments

Industrial production growth rate NA%

Electricity - capacity 217,000 kW (1997)

Electricity - production 1.2 billion kWh (1996)

Electricity - consumption per capita 60 kWh (1995)

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

Exports
total value: $313.1 million (f.o.b., 1996)
commodities: wood products, garments, electricity, coffee, tin
partners: Vietnam, Thailand, Germany, France

Imports
total value: $678 million (c.i.f., 1996)
commodities: machinery and equipment, vehicles, fuel
partners: Thailand, Japan, Vietnam, China, Singapore

Debt - external $1.2 billion (1996)

Economic aid
recipient: ODA, $212.2 million

Currency 1 new kip (NK) = 100 at

Exchange rates new kips (NK) per US$1 - 2,500 (January 1998), 1,256.73 (1997), 921.14 (1996), 804.69 (1995), 717.67 (1994), 716.25 (1993)
note: as of September 1995, a floating exchange rate policy was adopted

Fiscal year 1 October - 30 September

NOTE: The information regarding Laos on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Laos Economy 1998 information contained here. All suggestions for corrections of any errors about Laos Economy 1998 should be addressed to the CIA.