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Cambodia vs. Laos

Economy

CambodiaLaos
Economy - overview

Cambodia has experienced strong economic growth over the last decade; GDP grew at an average annual rate of over 8% between 2000 and 2010 and about 7% since 2011. The tourism, garment, construction and real estate, and agriculture sectors accounted for the bulk of growth. Around 700,000 people, the majority of whom are women, are employed in the garment and footwear sector. An additional 500,000 Cambodians are employed in the tourism sector, and a further 200,000 people in construction. Tourism has continued to grow rapidly with foreign arrivals exceeding 2 million per year in 2007 and reaching 5.6 million visitors in 2017. Mining also is attracting some investor interest and the government has touted opportunities for mining bauxite, gold, iron and gems.

 

Still, Cambodia remains one of the poorest countries in Asia, and long-term economic development remains a daunting challenge, inhibited by corruption, limited human resources, high income inequality, and poor job prospects. According to the Asian Development Bank (ADB), the percentage of the population living in poverty decreased to 13.5% in 2016. More than 50% of the population is less than 25 years old. The population lacks education and productive skills, particularly in the impoverished countryside, which also lacks basic infrastructure.

 

The World Bank in 2016 formally reclassified Cambodia as a lower middle-income country as a result of continued rapid economic growth over the past several years. Cambodia's graduation from a low-income country will reduce its eligibility for foreign assistance and will challenge the government to seek new sources of financing. The Cambodian Government has been working with bilateral and multilateral donors, including the Asian Development Bank, the World Bank and IMF, to address the country's many pressing needs; more than 20% of the government budget will come from donor assistance in 2018. A major economic challenge for Cambodia over the next decade will be fashioning an economic environment in which the private sector can create enough jobs to handle Cambodia's demographic imbalance.

 

Textile exports, which accounted for 68% of total exports in 2017, have driven much of Cambodia's growth over the past several years. The textile sector relies on exports to the United States and European Union, and Cambodia's dependence on its comparative advantage in textile production is a key vulnerability for the economy, especially because Cambodia has continued to run a current account deficit above 9% of GDP since 2014.

The government of Laos, one of the few remaining one-party communist states, began decentralizing control and encouraging private enterprise in 1986. Economic growth averaged more than 6% per year in the period 1988-2008, and Laos' growth has more recently been amongst the fastest in Asia, averaging more than 7% per year for most of the last decade.

Nevertheless, Laos remains a country with an underdeveloped infrastructure, particularly in rural areas. It has a basic, but improving, road system, and limited external and internal land-line telecommunications. Electricity is available to 83% of the population. Agriculture, dominated by rice cultivation in lowland areas, accounts for about 20% of GDP and 73% of total employment. Recently, the country has faced a persistent current account deficit, falling foreign currency reserves, and growing public debt.

Laos' economy is heavily dependent on capital-intensive natural resource exports. The economy has benefited from high-profile foreign direct investment in hydropower dams along the Mekong River, copper and gold mining, logging, and construction, although some projects in these industries have drawn criticism for their environmental impacts.

Laos gained Normal Trade Relations status with the US in 2004 and applied for Generalized System of Preferences trade benefits in 2013 after being admitted to the World Trade Organization earlier in the year. Laos held the chairmanship of ASEAN in 2016. Laos is in the process of implementing a value-added tax system. The government appears committed to raising the country's profile among foreign investors and has developed special economic zones replete with generous tax incentives, but a limited labor pool, a small domestic market, and corruption remain impediments to investment. Laos also has ongoing problems with the business environment, including onerous registration requirements, a gap between legislation and implementation, and unclear or conflicting regulations.

GDP (purchasing power parity)$72.356 billion (2019 est.)

$67.588 billion (2018 est.)

$62.89 billion (2017 est.)

note: data are in 2017 dollars
$56.11 billion (2019 est.)

$53.616 billion (2018 est.)

$50.463 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate6.9% (2017 est.)

7% (2016 est.)

7% (2015 est.)
6.9% (2017 est.)

7% (2016 est.)

7.3% (2015 est.)
GDP - per capita (PPP)$4,389 (2019 est.)

$4,159 (2018 est.)

$3,928 (2017 est.)

note: data are in 2017 dollars
$7,826 (2019 est.)

$7,593 (2018 est.)

$7,258 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 25.3% (2017 est.)

industry: 32.8% (2017 est.)

services: 41.9% (2017 est.)
agriculture: 20.9% (2017 est.)

industry: 33.2% (2017 est.)

services: 45.9% (2017 est.)
Population below poverty line16.5% (2016 est.)18.3% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 2%

highest 10%: 28% (2013 est.)
lowest 10%: 3.3%

highest 10%: 30.3% (2008)
Inflation rate (consumer prices)2.9% (2017 est.)

3% (2016 est.)
0.8% (2017 est.)

1.6% (2016 est.)
Labor force8.913 million (2017 est.)3.582 million (2017 est.)
Labor force - by occupationagriculture: 48.7%

industry: 19.9%

services: 31.5% (2013 est.)
agriculture: 73.1%

industry: 6.1%

services: 20.6% (2012 est.)
Unemployment rate0.3% (2017 est.)

0.2% (2016 est.)

note: high underemployment, according to official statistics
0.7% (2017 est.)

0.7% (2016 est.)
Distribution of family income - Gini index37.9 (2008 est.)

41.9 (2004 est.)
36.4 (2012 est.)

34.6 (2002)
Budgetrevenues: 3.947 billion (2017 est.)

expenditures: 4.354 billion (2017 est.)
revenues: 3.099 billion (2017 est.)

expenditures: 4.038 billion (2017 est.)
Industriestourism, garments, construction, rice milling, fishing, wood and wood products, rubber, cement, gem mining, textilesmining (copper, tin, gold, gypsum); timber, electric power, agricultural processing, rubber, construction, garments, cement, tourism
Industrial production growth rate10.6% (2017 est.)8% (2017 est.)
Agriculture - productscassava, rice, maize, vegetables, sugar cane, soybeans, rubber, oil palm fruit, bananas, porkrice, roots/tubers nes, cassava, sugar cane, vegetables, bananas, maize, watermelons, coffee, taro
Exports$11.42 billion (2017 est.)

$10.07 billion (2016 est.)
$3.654 billion (2017 est.)

$2.705 billion (2016 est.)
Exports - commoditiesclothing, precious metal scraps, trunks/cases, gold, leather footwear (2019)electricity, copper, rubber, gold, flavored water (2019)
Exports - partnersUnited States 21%, Singapore 8%, Thailand 8%, Germany 7%, Japan 6%, China 5%, Canada 5%, United Kingdom 5% (2019)Thailand 36%, China 28%, Vietnam 16% (2019)
Imports$14.37 billion (2017 est.)

$12.65 billion (2016 est.)
$4.976 billion (2017 est.)

$4.739 billion (2016 est.)
Imports - commoditiesrefined petroleum, clothing, gold, cars, flavored water (2019)refined petroleum, cars, cattle, iron structures, steel products (2019)
Imports - partnersChina 27%, Thailand 25%, Vietnam 15%, Singapore 8% (2019)Thailand 53%, China 26%, Vietnam 10% (2019)
Debt - external$11.87 billion (31 December 2017 est.)

$10.3 billion (31 December 2016 est.)
$14.9 billion (31 December 2017 est.)

$12.9 billion (31 December 2016 est.)
Exchange ratesriels (KHR) per US dollar -

4,055 (2017 est.)

4,058.7 (2016 est.)

4,058.7 (2015 est.)

4,067.8 (2014 est.)

4,037.5 (2013 est.)
kips (LAK) per US dollar -

8,231.1 (2017 est.)

8,129.1 (2016 est.)

8,129.1 (2015 est.)

8,147.9 (2014 est.)

8,049 (2013 est.)
Fiscal yearcalendar year1 October - 30 September
Public debt30.4% of GDP (2017 est.)

29.1% of GDP (2016 est.)
63.6% of GDP (2017 est.)

58.4% of GDP (2016 est.)
Reserves of foreign exchange and gold$12.2 billion (31 December 2017 est.)

$9.122 billion (31 December 2016 est.)
$1.27 billion (31 December 2017 est.)

$940.1 million (31 December 2016 est.)
Current Account Balance-$1.871 billion (2017 est.)

-$1.731 billion (2016 est.)
-$2.057 billion (2017 est.)

-$2.07 billion (2016 est.)
GDP (official exchange rate)$22.09 billion (2017 est.)$16.97 billion (2017 est.)
Credit ratingsMoody's rating: B2 (2007)

Standard & Poors rating: N/A (2014)
Fitch rating: CCC (2020)

Moody's rating: Caa2 (2020)
Ease of Doing Business Index scoresOverall score: 53.8 (2020)

Starting a Business score: 52.4 (2020)

Trading score: 67.3 (2020)

Enforcement score: 31.7 (2020)
Overall score: 50.8 (2020)

Starting a Business score: 62.7 (2020)

Trading score: 78.1 (2020)

Enforcement score: 42 (2020)
Taxes and other revenues17.9% (of GDP) (2017 est.)18.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-1.8% (of GDP) (2017 est.)-5.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 1.1%

male: 1%

female: 1.2% (2016 est.)
total: 18.2%

male: 20.8%

female: 15.5% (2017 est.)
GDP - composition, by end usehousehold consumption: 76% (2017 est.)

government consumption: 5.4% (2017 est.)

investment in fixed capital: 21.8% (2017 est.)

investment in inventories: 1.2% (2017 est.)

exports of goods and services: 68.6% (2017 est.)

imports of goods and services: -73% (2017 est.)
household consumption: 63.7% (2017 est.)

government consumption: 14.1% (2017 est.)

investment in fixed capital: 30.9% (2017 est.)

investment in inventories: 3.1% (2017 est.)

exports of goods and services: 34.6% (2017 est.)

imports of goods and services: -43.2% (2017 est.)
Gross national saving27.2% of GDP (2019 est.)

25.4% of GDP (2018 est.)

23.2% of GDP (2017 est.)
22.7% of GDP (2017 est.)

21.3% of GDP (2016 est.)

15.8% of GDP (2015 est.)

Source: CIA Factbook