ise in 1986. The results, starting from an extremely low
base, were striking - growth averaged 6% per year in 1988-2007
except during the short-lived drop caused by the Asian financial
crisis beginning in 1997. Despite this high growth rate, Laos
remains a country with a underdeveloped infrastructure, particularly
in rural areas. It has no railroads, a rudimentary road system, and
limited external and internal telecommunications, though the
government is sponsoring major improvements in the road system with
support from Japan and China. Electricity is available in urban
areas and in most rural districts. Subsistence agriculture,
dominated by rice, accounts for about 40% of GDP and provides 80% of
total employment. The economy will continue to benefit from aid from
international donors and from foreign investment in hydropower and
mining. Construction will be another strong economic driver,
especially as hydroelectric dam and road projects gain steam.
Several policy changes since 2004 may help spur growth. In late
2004, Laos gained Normal Trade Relations status with the US,
allowing Laos-based producers to benefit from lower tariffs on
exports. Laos is taking steps to join the World Trade Organization
in the next few years; the resulting trade policy reforms will
improve the business environment. On the fiscal side, a value-added
tax (VAT) regime, slated to begin in 2008, should help streamline
the government's inefficient tax system.

GDP (purchasing power parity):

$12.8 billion (2007 est.)

GDP (official exchange rate):

$4.028 billion (2007 est.)

GDP - real growth rate:

7.5% (2007 est.)

GDP - per capita (PPP):

$2,000 (2007 est.)

GDP - composition by sector:

agriculture: 40.9%
industry: 33.2%
services: 25.9% (2007 est.)

Labor force:

2.1 million (2006 est.)

Labor force - by occupation:

agriculture: 80%
industry and services: 20% (2005 est.)

Unemployment rate:

2.4% (2005 est.)

Population below poverty line:

30.7% (2005 est.)

Household income or consumption by percentage share:

lowest 10%: 3.4%
highest 10%: 28.5% (2002)

Distribution of family income - Gini index:

34.6 (2002)

Budget:

revenues: $473.1 million
expenditures: $647.2 million (2007 est.)

Fiscal year:

1 October - 30 September

Inflation rate (consumer prices):

4.5% (2007 est.)

Central bank discount rate:

12.67% (31 December 2007)

Commercial bank prime le