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Sunday, July 14, 2024

Laos Records a Trade Deficit of USD 88 Million in August

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Laos’ imports and exports totaled over USD 980 million in August, with exports valued approximately at USD 446 million and imports at USD 534 million, resulting in a trade deficit of USD 88 million.

Potassium salt was the most exported product with a value of USD 65 million, while diesel was the most imported product with a value of USD 58 million, according to the Lao Trade Portal (LTP).

In addition to potassium salt, other top exports from Laos last month included copper ore, sugar, rubber, pulp and scrap paper, clothing, iron ore, and bananas, while other most imported products included mechanical equipment, land vehicles, steel and steel products, auto parts, electronic appliances, gasoline, plastic products, and beverages.

Thailand remained Laos’ largest importation source at USD 240 million, followed by China at USD 175 million, Vietnam at USD 25 million, the US at USD 19 million, and Japan at USD 15 million.

China ranked first among Laos’ top five export partners with trade worth USD 210 million, followed by Vietnam at USD 77 million, Thailand at USD 54 million, Australia at USD 38 million, and the US at USD 10 million.

In July, South Korea and Hong Kong were both among the top five import and export countries, respectively. However, in August, Japan replaced South Korea as one of the top five import countries, and Australia replaced Hong Kong as one of the top five export partners.

Laos’ trade deficit decreased by USD 78 million in August, down from USD 166 million in July, the highest trade deficit the country has experienced this year.

According to the LTP, the value of imports and exports for August is not yet final because the figures for electricity trade are still being calculated, following which, the LTP will release updated trade numbers.

The consistent trade deficit is a cause for concern for the Lao government, as it is leading to a decline in foreign exchange reserves, affecting foreign currency exchange rates in the country. In early September, the Lao kip reached a historic low against foreign currencies, with commercial banks selling it at over LAK 20,000 per US dollar.

Nevertheless, to boost domestic production and combat inflation, the Ministry of Agriculture and Forestry (MOAF) also proposed banning imports of certain agricultural products, such as vegetables, pork, beef, and fish.

Additionally, Lao PM Sonexay Siphandone has called on all businesses to focus on increasing agricultural production, especially of processed goods to increase their demand in local and foreign markets, so as to reduce imports and boost exports.

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