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Vietnam vs. Laos

Economy

VietnamLaos
Economy - overview

Vietnam is a densely populated developing country that has been transitioning since 1986 from the rigidities of a centrally planned, highly agrarian economy to a more industrial and market based economy, and it has raised incomes substantially. Vietnam exceeded its 2017 GDP growth target of 6.7% with growth of 6.8%, primarily due to unexpected increases in domestic demand, and strong manufacturing exports.

Vietnam has a young population, stable political system, commitment to sustainable growth, relatively low inflation, stable currency, strong FDI inflows, and strong manufacturing sector. In addition, the country is committed to continuing its global economic integration. Vietnam joined the WTO in January 2007 and concluded several free trade agreements in 2015-16, including the EU-Vietnam Free Trade Agreement (which the EU has not yet ratified), the Korean Free Trade Agreement, and the Eurasian Economic Union Free Trade Agreement. In 2017, Vietnam successfully chaired the Asia-Pacific Economic Cooperation (APEC) Conference with its key priorities including inclusive growth, innovation, strengthening small and medium enterprises, food security, and climate change. Seeking to diversify its opportunities, Vietnam also signed the Comprehensive and Progressive Agreement for the Transpacific Partnership in 2018 and continued to pursue the Regional Comprehensive Economic Partnership.

To continue its trajectory of strong economic growth, the government acknowledges the need to spark a ‘second wave’ of reforms, including reforming state-owned-enterprises, reducing red tape, increasing business sector transparency, reducing the level of non-performing loans in the banking sector, and increasing financial sector transparency. Vietnam’s public debt to GDP ratio is nearing the government mandated ceiling of 65%.

In 2016, Vietnam cancelled its civilian nuclear energy development program, citing public concerns about safety and the high cost of the program; it faces growing pressure on energy infrastructure. Overall, the country’s infrastructure fails to meet the needs of an expanding middle class. Vietnam has demonstrated a commitment to sustainable growth over the last several years, but despite the recent speed-up in economic growth the government remains cautious about the risk of external shocks.

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)
$648.7 billion (2017 est.)
$607.4 billion (2016 est.)
$571.9 billion (2015 est.)

note: data are in 2017 dollars

$49.34 billion (2017 est.)
$46.16 billion (2016 est.)
$43.13 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
6.8% (2017 est.)
7.16% (2017 est.)
6.2% (2016 est.)
6.9% (2017 est.)
7% (2016 est.)
7.3% (2015 est.)
GDP - per capita (PPP)
$6,900 (2017 est.)
$6,600 (2016 est.)
$6,200 (2015 est.)

note: data are in 2017 dollars

$7,400 (2017 est.)
$7,000 (2016 est.)
$6,600 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 15.3% (2017 est.)
industry: 33.3% (2017 est.)
services: 51.3% (2017 est.)
agriculture: 20.9% (2017 est.)
industry: 33.2% (2017 est.)
services: 45.9% (2017 est.)
Population below poverty line
8% (2017 est.)
22% (2013 est.)
Household income or consumption by percentage share
lowest 10%: 2.7%
highest 10%: 26.8% (2014)
lowest 10%: 3.3%
highest 10%: 30.3% (2008)
Inflation rate (consumer prices)
3.5% (2017 est.)
2.7% (2016 est.)
0.8% (2017 est.)
1.6% (2016 est.)
Labor force
54.659 million (2019 est.)
3.582 million (2017 est.)
Labor force - by occupation
agriculture: 40.3%
industry: 25.7%
services: 34% (2017)
agriculture: 73.1%
industry: 6.1%
services: 20.6% (2012 est.)
Unemployment rate
3.11% (2018 est.)
2.2% (2017 est.)
0.7% (2017 est.)
0.7% (2016 est.)
Distribution of family income - Gini index
34.8 (2014)
37.6 (2008)
36.7 (2008)
34.6 (2002)
Budget
revenues: 54.59 billion (2017 est.)
expenditures: 69.37 billion (2017 est.)
revenues: 3.099 billion (2017 est.)
expenditures: 4.038 billion (2017 est.)
Industries
food processing, garments, shoes, machine-building; mining, coal, steel; cement, chemical fertilizer, glass, tires, oil, mobile phones
mining (copper, tin, gold, gypsum); timber, electric power, agricultural processing, rubber, construction, garments, cement, tourism
Industrial production growth rate
8% (2017 est.)
8% (2017 est.)
Agriculture - products
rice, coffee, rubber, tea, pepper, soybeans, cashews, sugar cane, peanuts, bananas; pork; poultry; seafood
sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; cassava (manioc, tapioca), water buffalo, pigs, cattle, poultry
Exports
$214.1 billion (2017 est.)
$176.6 billion (2016 est.)
$3.654 billion (2017 est.)
$2.705 billion (2016 est.)
Exports - commodities
clothes, shoes, electronics, seafood, crude oil, rice, coffee, wooden products, machinery
wood products, coffee, electricity, tin, copper, gold, cassava
Exports - partners
US 20.1%, China 14.5%, Japan 8%, South Korea 6.8% (2017)
Thailand 42.6%, China 28.7%, Vietnam 10.4%, India 4.4% (2017)
Imports
$202.6 billion (2017 est.)
$162.6 billion (2016 est.)
$4.976 billion (2017 est.)
$4.739 billion (2016 est.)
Imports - commodities
machinery and equipment, petroleum products, steel products, raw materials for the clothing and shoe industries, electronics, plastics, automobiles
machinery and equipment, vehicles, fuel, consumer goods
Imports - partners
China 25.8%, South Korea 20.5%, Japan 7.8%, Thailand 4.9% (2017)
Thailand 59.1%, China 21.5%, Vietnam 9.8% (2017)
Debt - external
$96.58 billion (31 December 2017 est.)
$84.34 billion (31 December 2016 est.)
$14.9 billion (31 December 2017 est.)
$12.9 billion (31 December 2016 est.)
Exchange rates
dong (VND) per US dollar -
22,425 (2017 est.)
22,159 (2016 est.)
22,355 (2015 est.)
21,909 (2014 est.)
21,189 (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 year
calendar year
1 October - 30 September
Public debt
58.5% of GDP (2017 est.)
59.9% of GDP (2016 est.)

note: official data; data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions

63.6% of GDP (2017 est.)
58.4% of GDP (2016 est.)
Reserves of foreign exchange and gold
$49.5 billion (31 December 2017 est.)
$36.91 billion (31 December 2016 est.)
$1.27 billion (31 December 2017 est.)
$940.1 million (31 December 2016 est.)
Current Account Balance
$12.478 billion (2019 est.)
$5.769 billion (2018 est.)
-$2.057 billion (2017 est.)
-$2.07 billion (2016 est.)
GDP (official exchange rate)
$220.4 billion (2017 est.)
$16.97 billion (2017 est.)
Stock of direct foreign investment - at home
$129.5 billion (31 December 2017 est.)
$293.2 billion (31 December 2016 est.)
$15.14 billion (31 December 2012 est.)
$12.44 billion (31 December 2011 est.)
Market value of publicly traded shares
$156.7 billion (29 December 2017 est.)
$87.95 billion (31 December 2016 est.)
$52.39 billion (31 December 2015 est.)
$1.012 billion (2012 est.)
$576.8 million (2011 est.)
Central bank discount rate
4.25% (7 October 2017)
15% (31 December 2011)
4.3% (31 December 2010)
4% (31 December 2009)
Commercial bank prime lending rate
7.07% (31 December 2017 est.)
6.96% (31 December 2016 est.)
18.5% (31 December 2017 est.)
18% (31 December 2016 est.)
Stock of domestic credit
$313 billion (31 December 2017 est.)
$277.3 billion (31 December 2016 est.)
$9.3 billion (31 December 2017 est.)
$8.623 billion (31 December 2016 est.)
Stock of narrow money
$85.96 billion (31 December 2017 est.)
$73.48 billion (31 December 2016 est.)
$1.131 billion (31 December 2017 est.)
$1.1 billion (31 December 2016 est.)
Stock of broad money
$85.96 billion (31 December 2017 est.)
$73.48 billion (31 December 2016 est.)
$1.131 billion (31 December 2017 est.)
$1.1 billion (31 December 2016 est.)
Taxes and other revenues
24.8% (of GDP) (2017 est.)
18.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-6.7% (of GDP) (2017 est.)
-5.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 6.9%
male: 6%
female: 7.9% (2018 est.)
total: 18.2%
male: 20.8%
female: 15.5% (2017 est.)
GDP - composition, by end use
household consumption: 66.9% (2017 est.)
government consumption: 6.5% (2017 est.)
investment in fixed capital: 24.2% (2017 est.)
investment in inventories: 2.8% (2017 est.)
exports of goods and services: 100% (2017 est.)
imports of goods and services: -101% (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 saving
29% of GDP (2017 est.)
29.5% of GDP (2016 est.)
27.5% of GDP (2015 est.)
22.7% of GDP (2017 est.)
21.3% of GDP (2016 est.)
15.8% of GDP (2015 est.)

Source: CIA Factbook