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Laos Country Risk Report Q4 2019

Laos Country Risk Report Q4 2019

We at Fitch Solutions expect economic activity to cool gradually in the coming years, with growth stabilising around the 6.0-6.5% range over the medium term.

Construction activity and rising tourist arrivals should support the economic expansion, though high import demand will ensure a negative contribution of next exports.

Rising government debt and persistent budget deficits will restrict the government's capacity for pro-growth spending over the coming years.

Despite the criticisms and potential for increased international scrutiny, we do not anticipate a radical shift in government policy in the near future.

Major Forecast Changes

We expect the budget deficit to fall to 3.9% in 2019 and 3.0% in 2020, from an estimated 4.6% in 2018, as the government aims to reduce financing risks.

Key Risks

Laos remains heavily dependent on China as its main export market and source of investment, leaving the country vulnerable at a time of slowing regional growth and higher trade risks.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Fiscal Constraints An Emerging Headwind For Laos' Growth
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
Outlook On External Position
TABLE: MAIN EXPORT AND IMPORT PARTNERS
TABLE: MAIN EXPORTS AND IMPORTS
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
10-Year Forecast
The Laotian Economy To 2028
Structural Weaknesses To Contain Growth Potential
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Dialogue To Keep Laos-Cambodia Border Tensions In Check
TABLE: POLITICAL OVERVIEW
Laos Country Risk Q4 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report is solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.ContentsLong-Term Political Outlook
Low Chance Of Political Liberalisation Over Coming Decade
Global Macro Outlook
Potential Policy Missteps Pose The Largest Risk To Global Growth
TABLE: GLOBAL MACROECONOMIC FORECASTS (2019-2024)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: LAOS – MACROECONOMIC DATA AND FORECASTS

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