Looming debt crunch positions Laos as next possible Asia default

Laos, with dwindling cash reserves and surging inflation, is facing some of the same strains that pushed Sri Lanka to default and threatens Pakistan’s balance of payments.

Fuel shortages across the Southeast Asian country of 7.5 million people is the latest sign of distress, the result of elevated oil prices and a plunging currency. Most worrying is a debt load that dwarfs its cash pile, a challenge for the secretive communist regime that’s had an ironclad grip on power since 1975. 

“It is on the brink of default,” said Anushka Shah, vice president and senior credit officer at Moody’s Investors Service, which downgraded…