U.s. Department of Commerce

Business Opportunities in Laos U.s. Department of Commerce

The Lao market economy has grown at a nearly 7% clip for the last decade and is heading into a new phase of regional and global integration. After acceding to the World Trade Organization in 2013, Laos looks to the ASEAN Economic Community as a marker for its next set of economic policy and trade development goals. The Lao government suffered through a fiscal and monetary crisis in 2013 and into 2014, brought about by poor budgetary processes, uncontrolled investment in infrastructure, and a large raise for civil servants. Government fiscal and budgetary policy formulation and implementation remain weak but the government is taking steps to address some deficiencies. Laos is one of five remaining communist countries in the world and this legacy continues to weigh on both governance and the economy. The Lao economic model bears some relation to its Chinese and Vietnamese counterparts, in that it has implemented market-based economic practices while maintaining a very high degree of political control. Laos is politically stable. Laos and the United States signed a bilateral trade agreement in 2005, although the terms of the agreement are still being implemented in Laos, with U. S. assistance. Since 2005 trade has increased from $14 million to $55 million per year in 2013. Vietnam, China and Thailand have dominant trade and investment roles in the Lao economy, with participation in certain sectors by Korea, France, Japan, Australia, Malaysia and Singapore. Bilateral trade between Laos and Thailand, its largest trading partner by far, totaled $5 billion in 2012. Laos? GDP was an estimated $11.1 billion in 2013, up 8.1 percent from the prior year. The Lao economy is projected to grow at 8 percent annually through 2020. Inflation was 6.4 percent in 2013.