LAO Laos profile

Laos is governed by a single ruling party that dominates political life, with formal elections but limited political pluralism. The Lao People’s Revolutionary Party controls key institutions, including security forces and the public administration, and political dissent faces restrictions. The judiciary operates within a system that prioritizes party directives, reducing institutional independence. Administrative capacity varies, with centralized decision making and uneven service delivery across provinces, especially in rural areas. Civil society organizations function under constraints, and media freedom is restricted, limiting independent scrutiny of governance. Corruption and opaque decision processes can hinder transparency and accountability, while centralized planning frames development priorities and resource allocation.

Colonial history Colonized by France
Former colonizer France
Government type Communist one-party state
Legal system Civil law system
Political stability Generally stable, though it faces challenges

The economy relies on state control and a limited set of export oriented sectors. Public investment prioritizes infrastructure and energy projects, with hydropower and mining drawing foreign capital and technology. Private sector growth is constrained by regulatory hurdles, land access issues, and formal constraints, making diversification slow. Laos balances openness to foreign investors with policy preferences that keep critical sectors under state oversight, leading to a mixed economy with uneven competition. Dependence on neighboring markets for export and imports creates exposure to external shocks. Rural livelihoods remain vulnerable, and wage levels are modest, limiting domestic demand growth. Environmental and social costs of large projects are a persistent concern in planning and implementation.

Currency name Lao Kip
Economic system Mixed economy with a degree of state control
Informal economy presence Significant presence, especially in rural areas
Key industries Agriculture, Mining, Hydropower, Tourism
Trade orientation Exports primarily to Thailand, China, and Vietnam; imports from China and Thailand

Laos is landlocked in a mountainous region with significant biodiversity and watershed importance. Proximity to the Mekong River shapes economic and ecological dynamics, with dam development affecting sediment flow, fish stocks, and livelihoods along the river. Deforestation and land use change threaten ecosystems and increase vulnerability to climate variability. Environmental governance faces capacity gaps, with planning and enforcement uneven across regions. Transboundary environmental issues require coordination with neighboring countries, yet institutional mechanisms are often underfunded or fragmented. Urban expansion and infrastructure development put pressure on natural resources, while climate change adds risk to agriculture and hydrological baselines.

Bordering countries Vietnam, Thailand, Cambodia, China, Myanmar
Climate type Tropical monsoon
Continent Asia
Environmental Issues Deforestation, wildlife poaching, and soil erosion
Landlocked Yes
Natural Hazards Flooding, drought, and landslides
Natural resources Timber, hydropower, minerals, limestone, and coal
Terrain type Mountains, plateaus, hills, and valleys

Demographic composition includes multiple ethnic groups and a rural majority, with disparities in access to education, health care, and basic services. Education and health outcomes depend on geographic location, with rural and remote communities underserved. Social policy aims at poverty reduction, but gaps remain in inclusion and equity for minority communities. Constraints on civil society and media limit public debate about social issues. Population movements from rural areas to towns and cross border migration shape demand for services and housing. Gender equality progress is uneven, with continuing challenges in rural labor markets and social support structures. Cultural diversity is a strength but can be overshadowed by central planning and language policies that privilege dominant groups.

Cultural heritage Rich in traditional arts, festivals, and historical sites
Driving side Right
Education system type Public and private education system
Ethnic composition Predominantly Lao, with numerous ethnic minority groups
Family structure Extended family system
Healthcare model Mixed model with public health services
Major religions Buddhism, Animism
Official languages Lao

Infrastructure development focuses on roads, ports, and energy infrastructure, with major projects financed or guided by external partners. Access to electricity and telecoms has expanded, but service quality and reliability vary widely between urban centers and rural areas. The internet and digital services are expanding gradually, yet digital inclusion is uneven and affordability remains a barrier for many households. Public sector reliance on centralized procurement and regulatory controls can hamper private tech entrepreneurship and slow adoption of new technologies. Transport networks remain inadequate in remote areas, affecting trade, health, and education outcomes. Data governance and cyber safeguards are evolving but face capacity and resource constraints, which can affect user trust and service resilience.

Internet censorship level Moderate
Tech innovation level Emerging, with growing interest in digital technologies
Transport system type Road, river, and limited rail transport

Development indicators

Indicator Year Value Rank 5Y Rank Change
Political Stability and Absence of Violence/Terrorism 2023 0.814 44 -30
Regulatory Quality 2023 -0.928 163 -1
Rule of Law 2023 -0.833 154 -7
Birth rate, crude (per 1,000 people) 2023 21.3 66 -2
Death rate, crude (per 1,000 people) 2023 6.22 134 +21
GDP per capita (current US$) 2024 2,124 148 -6
GDP per capita, PPP (current international US$) 2024 9,788 127 -10
High-technology exports (current US$) 2021 109,835,608 79 +16
Hospital beds (per 1,000 people) 2021 1.31 50 -45
Inflation, consumer prices (annual %) 2024 23.1 12 -43
Life expectancy at birth, total (years) 2023 69 158 +1
Mortality rate, under-5 (per 1,000 live births) 2023 39 43 -1
Net migration 2024 -10,284 151 0
Population, total 2024 7,769,819 102 -1
Prevalence of undernourishment (% of population) 2022 5.4 73 +8
Renewable energy consumption (% of total final energy consumption) 2022 49.2 19 -23
Foreign direct investment, net inflows (% of GDP) 2023 11.2 16 -7
Current account balance (% of GDP) 2023 2.55 43 -110
Level of water stress: freshwater withdrawal as a proportion of available freshwater resources 2021 4.79 124 0
Total greenhouse gas emissions excluding LULUCF per capita (t CO2e/capita) 2023 5.49 80 -9
Current health expenditure (% of GDP) 2022 2.02 190 +5
Domestic general government health expenditure per capita, PPP (current international US$) 2022 58.6 154 +8
Physicians (per 1,000 people) 2021 0.327 81 -18
Suicide mortality rate (per 100,000 population) 2021 4.58 129 -3
Individuals using the Internet (% of population) 2023 63.6 99 -21
Control of Corruption 2023 -0.974 156 -11
Government Effectiveness 2023 -0.643 140 -11
Unemployment, total (% of total labor force) 2022 1.21 117 +3
Logistics performance index: Quality of trade and transport-related infrastructure (1=low to 5=high) 2022 2.3 23

Demography and Health

Laos had an estimated population of 7,769,819 in 2024, placing the country around the middle of the pack by population size. The demographic profile shows a relatively high birth rate of 21.3 per 1,000 people (2023) and a crude death rate of 6.22 per 1,000 (2023), with life expectancy at birth at 69.0 years (2023). The under-5 mortality rate stands at 39 per 1,000 live births (2023), signaling ongoing challenges in child health services and outcomes. Health infrastructure indicators point to limited access to care: 1.31 hospital beds per 1,000 people (2021) and 0.327 physicians per 1,000 people (2021). Health spending remains modest, with current health expenditure at 2.02% of GDP (2022) and domestic government health expenditure per capita (PPP) of 58.6 international dollars (2022). Nutritional vulnerability affects a portion of the population, with 5.4% undernourished (2022). Social outcomes include a suicide rate of 4.58 per 100,000 (2021) and internet usage at 63.6% of the population (2023), reflecting partial digital connectivity. Net migration is negative, at −10,284 in 2024, suggesting outward movement of people that can influence labor markets and rural-urban dynamics. Taken together, these indicators depict a youthful population with gradual health and nutrition improvements but persistent gaps in health infrastructure and access, particularly in rural areas.

Economy

Laos exhibits a low-income economy with a GDP per capita of about $2,124 in 2024 (current US$) and a GDP per capita based on PPP around $9,788 (2024), signaling significant income disparities relative to high-income peers and substantial room for productivity gains. Inflation runs high, at 23.1% in 2024, which erodes purchasing power and can pose policy challenges for price stability and social protection. The unemployment rate was 1.21% in 2022, consistent with a labor market that may be characterized by informal employment and underemployment rather than formal joblessness. The economy shows some external dynamism: high-technology exports amount to roughly $110 million in 2021, indicating limited but existing top-end manufacturing capacity. Laos records a current account balance of about 2.55% of GDP in 2023, and net foreign direct investment inflows equal to 11.2% of GDP (2023), suggesting an openness to investment despite modest domestic scale. The energy-and-exports tilt of the economy—coupled with a large hydropower potential—helps attract investment, while the overall macroeconomic environment remains exposed to price and external demand fluctuations. In sum, Laos blends low income with rising investment and external connectivity, but faces inflationary pressures and a need for structural diversification to raise productivity and living standards.

Trade and Investment

Laos’ trade and investment landscape shows a noticeable degree of openness, with foreign direct investment net inflows at 11.2% of GDP in 2023, signaling strong external financing and investor interest relative to a small domestic market. The country maintains a positive current account balance of 2.55% of GDP in 2023, indicating that external receipts from trade and investment help offset some imports. However, trade facilitation and logistics capacity appear constrained: the Logistics Performance Index measured at 2.3 (on a 1–5 scale, with 5 being best) in 2022 suggests room for improvement in the quality of trade and transport-related infrastructure. The combination of moderate high-technology export values (about $110 million in 2021) and dependent export channels underscores Laos’ ongoing challenge of diversifying its export base beyond resource and energy-related flows, while leveraging foreign investment to modernize production and logistics. Overall, Laos sits at a critical juncture where investment and better logistics could unlock higher growth, provided macro stability improves and trade networks expand.

Governance and Institutions

Laos’ governance indicators reveal a mixed institutional picture. Political stability and absence of violence/terrorism score 0.814 (2023), with a rank of 44, suggesting relative stability. Yet, governance quality indicators are notably weaker: regulatory quality −0.928 (rank 163) and rule of law −0.833 (rank 154) reflect substantial gaps in regulatory effectiveness and legal institutions. Control of corruption is also low at −0.974 (rank 156), along with government effectiveness at −0.643 (rank 140). These tendencies imply that while political risk may be contained, the capacity of public institutions and the rule of law to support predictable business environments and governance reforms remains constrained. The combination of stable politics and weak governance institutions may hinder deeper policy reforms, investment climate improvements, and service delivery, even as foreign investment and external engagement continue to shape the country’s trajectory.

Infrastructure and Technology

Laos shows mid-range digital connectivity but relatively nascent technological infrastructure. Individuals using the Internet account for 63.6% of the population (2023), indicating substantial digital reach but not universal access. The country also registers a modest high-technology exports figure of about $110 million (2021), underscoring a limited but growing engagement with advanced manufacturing and R&D-intense sectors. The Logistics Performance Index—Quality of trade and transport-related infrastructure—stood at 2.3 (2022), pointing to significant room for improvement in roads, ports, and border procedures that affect the ease of moving goods domestically and across borders. The health and education infrastructure indicators from the demography category—such as hospital beds per 1,000 people (1.31 in 2021) and physicians per 1,000 people (0.327 in 2021)—also reflect gaps in service delivery capacity that intersect with broader infrastructure and technology development. Taken together, Laos has meaningful connectivity growth opportunities but still faces tangible gaps in transport logistics and advanced technical capacity that can anchor productivity gains and regional integration.

Environment and Sustainability

Laos displays notable progress in renewable energy utilization, with renewable energy accounting for 49.2% of total final energy consumption in 2022, consistent with a strong hydropower orientation and ongoing shifts toward sustainable electricity generation. Nevertheless, environmental pressures are evident in energy and emissions profiles: total greenhouse gas emissions per capita (excluding LULUCF) are 5.49 t CO2e in 2023, reflecting a developing economy with energy-intensive activities. Water resource stress is relatively low in the data (level of water stress: freshwater withdrawal as a share of available freshwater resources at 4.79 in 2021, rank 124), suggesting Laos has ample water resources relative to needs, though regional and seasonal variability can still pose challenges. The prevalence of undernourishment remains a concern in terms of human development (5.4% of the population, 2022), underscoring the link between environmental conditions, agriculture, and nutrition. Overall, Laos’ environmental profile indicates substantial renewable energy potential and hydro-related advantages, coupled with the need to manage emissions growth and ensure resilience for vulnerable rural communities.