Despite the current global economic downturn, the Government of Laos proposed that the National Assembly of Laos establish an economic growth target of at least 4.5% for 2023.
The agricultural sector, which currently accounts for 17.2% of the country's GDP, is predicted to expand by about 2.5% in 2023, while the industry will experience a 5% growth, representing 34.2% of GDP.
While payments from tariffs and taxes are expected to grow at a rate of 4.3% and 11.1%, respectively, respectively, the service sector is expected to grow at a rate of 4.7%, accounting for 37.5% of GDP.
By the end of the year, it is anticipated that the GDP will increase by 234,160 billion kip (13.5 billion USD), with a per capita GDP of 1,625 USD and a per capita gross national income (GNI) of 1,534 USD.
The government of Laos, according to Minister of Planning and Investment Khamjane Vongphosy, has promised to maintain inflation at or below 9% in 2023.
The kip, the local currency of Laos, has continued to decline over the past few years, increasing the country's foreign debt as more money must be spent to purchase foreign currency to settle its debt.
Laos' per capita GNI only hit 1,729 USD in 2022, which is less than the 2,358 USD set by the National Assembly. Due to the weakening of the kip, it dropped from 2,161 USD in 2020 to 2,004 USD in 2021.
The population of Laos, a tiny, landlocked nation in Southeast Asia, is roughly 7 million. Its economy has grown rapidly in recent years, averaging about 6.5% annually between 2011 and 2019. The COVID-19 pandemic, however, has had a major effect on the economy, causing a decline in 2020.
Subsistence farming and the export of natural resources like timber and minerals have historically driven the development of Laos' agrarian economy. The government has lately given manufacturing, tourism, and infrastructure improvement top priority as growth sectors.
The country is a desirable site for foreign investment due to its strategic location along the Mekong River and close proximity to nations like Thailand and China.
Laos, with a GDP per capita of about $2,500 in 2020, remains one of the region's poorest nations despite its economic development. The nation also has issues with poor governance, corruption, and a small private industry.
The COVID-19 pandemic has also had a big effect on the economy, especially in the tourism industry, which contributes significantly to the nation's foreign currency earnings.
Laos has made strides in recent years in terms of economic expansion and the decrease of poverty, but it still has a long way to go before it can experience sustained, inclusive growth and development.