According to a recent report by Fitch, Laos’s public external debt was an estimated USD 16.9 bln in 2021, making up about 102% of the country’s GDP. Around 93% of this debt is long-term. While the central bank had been accumulating FX reserves over the past decade, 2022 saw a shift as FX shortages began to impact reserves. At the end of 2022, FX reserves stood at an estimated USD 1.07 bln, covering only about 1.89 months of imports, far below the recommended three months. This low level of import cover, combined with the high external debt, presents significant risks to the country’s external stability.