Services and Supply

The macroeconomic situation in Lao PDR has grown more complex in the past three years. The COVID-19 epidemic, increasing governmental debt, and challenging global economic conditions have worsened existing structural weaknesses. Consequently, the national currency has depreciated and inflation is rising rapidly. This condition disproportionately impacts individuals with lower socioeconomic status. Steady expansion in the last twenty years was mainly propelled by significant investments in areas that need a huge amount of money, such as mining and hydropower.

Lao manufacturing heavily depends on natural resources to drive the country's economic growth. Only a tiny number of companies are involved in high-technology manufacturing, namely in the communications and chemical sectors. The bulk of manufacturing companies are small and medium-sized enterprises (SMEs) that mostly create medium- and low-technology products. Although facing economic growth issues, the service and supply sectors are nonetheless able to meet requirements by importing goods and services from neighboring nations. Goods and services are exchanged between Thailand, China, and Vietnam through both the formal and informal economy.

Source: https://www.worldbank.org/en/country/lao/overview