Laos will likely need bailout to avoid default

Significance The report says the country “remains in debt distress” and that there is a “high probability of a future distress event”. Problems such as the rapid depreciation of the kip, high inflation and low foreign exchange (forex) reserves are all linked to the country’s debt difficulties. Impacts GDP growth will be relatively slow throughout the remainder of the 2020s as the effects of excessive borrowing catch up with the country. The resource sector will remain relatively sheltered from the economic slowdown and continue to attract foreign investment. A default would threaten the security of investor assets and prompt broader regional instability.