Laos Economy to Grow by 4.5% in 2023, Say Researchers

Laos’ Economy to Grow by 4.5%, Say Lao Researchers
Lao - Thai trade by boat. ( Photo : Bangkok Post )

Researchers in Laos are optimistic and predict that the economy may grow up to 4.5% this year.

The Macro-economic Research Institute of the Lao Academy of Social and Economic Sciences (LASES) released a report on May 17 that showed that the service sector, tourism and processing industries, and surge in export of agricultural products will drive the economy upwards.

The opening of the international train trade route between Laos and China has also played a key role in bolstering the Lao economy, says Vice President of the LASES, Dr Kikeo Chanthaboury.

However, there are also pressing challenges facing Laos, such as soaring inflation, high public debt, depreciation of the currency and Lao workers seeking better pay abroad. These challenges are made worse by the problem with regulating the local currency, which directly impacts the cost of goods.

Despite these challenges, the reopening of China’s 1.3 billion person market is beneficial to Laos. This year alone, more than three million tonnes of agricultural products were exported to China, Thailand and Vietnam.

The agricultural sector is set to see an increase of 3.5% this year following an injection of funds for boosting productivity. The Industrial sector hopes to see an increase of 4.6% from export related to processing industries in special economic zones.

The construction sector is also set to see growth, although financial hardships faced by the government and reducing capital inflows may affect its growth.

Last year, the country’s total trade surplus amounted to approximately USD 15 billion, with exports worth USD 8.198 billion and imports worth USD 6.808 billion.