Lao People’s Democratic Republic: 2019 Article IV Consultation — Press Release; Staff Report; Statement by the Executive Director for Lao People's Democratic Republic
IMF Staff Country Reports, August 8, 2019
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- Lao People’s Democratic Republic: 2019 Article IV Consultation — Press Release; Staff Report; Statement by the Executive Director for Lao People's Democratic Republic
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Bibliographic details
- Published: August 8, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513510491.002
Key findings and country context
- After more than a decade of high growth with low inflation, the country is solidifying its progress toward graduating from the Least Developed Country (LDC) status.
- More than one-fifth of the population remains poor.
- Regional disparities are persistent.
- Recurring natural disasters pose risks for poverty reduction.
- A large current account deficit, low level of reserves, a high level of debt, managed exchange rate, and a dollarized banking system amplify macro-vulnerabilities.
- The authorities recognize the current economic challenges and have comprehensive reform programs aimed at rebalancing the economy from a resource based to a more diversified growth model by investing in human development and improving competitiveness.
- Modernizing monetary governance and building reserves supported by greater exchange rate flexibility are recommended to help mitigate external shocks in an uncertain global environment.
Macro-vulnerabilities and financial system characteristics
- External sector:
- Large current account deficit.
- Low level of reserves.
- Public and external debt:
- High level of debt.
- Exchange rate and monetary conditions:
- Managed exchange rate.
- Dollarized banking system.
- Poverty and social risks:
- More than one-fifth of the population remains poor.
- Recurring natural disasters threaten poverty reduction gains.
- Structural features:
- Economy currently resource based; authorities aim to diversify growth.
Policy directions and reform priorities
- Rebalance the economy from resource based growth to a more diversified model.
- Invest in human development to support inclusive growth.
- Improve competitiveness to attract sustainable investment and growth.
- Modernize monetary governance.
- Build international reserves.
- Increase exchange rate flexibility to better absorb external shocks.
Report and publication note
- This assessment is presented in the 2019 Article IV Consultation package for Lao People’s Democratic Republic.
International Monetary Fund. Lao People’s Democratic Republic: 2019 Article IV Consultation-Press Release; Staff Report; Statement by the Executive Director for Lao People's Democratic Republic, August 8, 2019.
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