Laos Faces Second Month of Trade Deficit Despite Cassava Export Boom

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Cassava (Photo: Bangkok Post)

In February, cassava continued to dominate Laos’ export market, maintaining its position as the top export product for the month. However, for the second consecutive month, Laos experienced a trade deficit, amounting to USD 40 million. The March report is yet to be published.

According to government sources, Laos’ two-way trade reached USD 1,101 million in February. The total export value stood at approximately USD 530 million, while imports amounted to around USD 570 million.

Cassava led the export charts with a value of USD 95 million, followed by mixed gold at USD 60 million, copper ore at USD 47 million, paper and paper products at USD 26 million, and cassava starch at USD 24 million. Other notable exports included wood pulp and paper waste, sugar, bananas, and rubber.

On the import side, diesel was the top import commodity valued at USD 103 million, followed by land vehicles at USD 49 million, mechanical equipment at USD 39 million, steel and steel products at USD 28 million, and electrical appliances and equipment at USD 25 million. Gasoline, vehicle spare parts, plastic utensils, finished chemical products, and aluminum products were also among the top imports.

Although there is a trade deficit, the Lao Trade Portal notes that the report does not take into account the value of electricity trade.

China retained its position as the primary destination for Laos’ exports, with a value of USD 180 million, followed by Thailand at USD 146 million, Vietnam at USD 92 million, Australia at USD 32 million, and India at USD 19 million. 

On the other hand, Thailand remained a primary source of imports for Laos, amounting to USD 294 million, followed by China at USD 175 million, Vietnam at USD 25 million, the United States at USD 14 million, and Japan at USD 13 million.

Alongside the trade deficit, Laos is also grappling with economic challenges exacerbated by rising inflation rates. In the first quarter of 2024, Laos recorded an overall inflation rate of 24.93 percent compared to the previous year, with January at 24.4 percent, February at 25.35 percent, and March at 24.98 percent.

Despite these challenges, the Asian Development Bank (ADB) has forecasted moderate economic growth for Laos in 2024 and 2025. The GDP is expected to rise by 4 percent each year, driven by factors such as tourism, trade, and foreign investment in renewable energy.