Laos Steps Up Debt Reforms With New Strategy, Stronger Oversight_blog

01 Dec, 2025

Laos Steps Up Debt Reforms With New Strategy, Stronger Oversight

Laos is advancing major public debt management reforms with a new medium-term strategy and tighter oversight of state-owned enterprises to strengthen fiscal stability and support economic growth, Deputy Minister of Finance Soulivath Souvannachoumkham said on 25 November.

He said the government is drafting a nationwide strategy expected to guide borrowing decisions, improve risk management, and make debt levels more sustainable.

Recent steps include the creation of the Public Debt Statistics Division in 2021, which has improved transparency and the accuracy of debt reporting.

Oversight of state-owned enterprises, especially Electricité du Laos, has also been strengthened through closer debt monitoring, mandatory reporting, and a temporary halt on new government guarantees to limit high-risk liabilities.

Economic Context and Inflation Trends

These reforms build on progress since the first policy dialogue in October 2023, the official noted.

He shared that inflation has fallen from 31.2 percent in 2023 to 4.0 percent in October 2025, the exchange rate has stabilized, and revenue collection has improved.

Economic growth reached 4.3 percent in 2024 and is expected to rise to 4.8 percent by the end of 2025, supported by energy exports, recovering tourism, and stronger investor confidence.

Recent government data also shows encouraging improvements in the country’s fiscal position, including the repayment of USD 2.45 billion in foreign debt between 2024 and September 2025.

Reform progress in the foreign exchange sector has further supported fiscal stability.

The establishment of the Lao Foreign Exchange Market has increased market transparency, encouraged greater use of the kip, and enabled more local currency settlements with neighbouring countries.

These measures are aimed at reducing reliance on foreign currencies, strengthening the effectiveness of monetary policy, and improving exchange rate predictability.

Despite overall improvements, household costs remain a concern. Inflation rose slightly to 4.8 percent in November, driven by higher prices for electricity, water, health care, and education, according to the Lao Statistics Bureau. Raising VAT from 7 to 10 percent has helped boost government revenue but places additional pressure on consumers.

Outlook Remains Positive but Risks Persist

Meanwhile, the International Monetary Fund (IMF) expects Laos’ economy to grow by 4.5 percent in 2026, supported by exports, tourism, foreign investment, and a supportive fiscal stance. Inflation is expected to rise gradually due to planned fiscal measures and electricity price adjustments.

The IMF warned that external pressures and weaknesses in parts of the banking sector remain risks. It said continued reforms, stronger governance, and better oversight of state-owned enterprises will be important for long-term economic stability.

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03 Dec, 2025

Lao Migrant Workers Send Home USD 366 Million in First Half of 2025, Under 10% Using Banks

Lao migrant workers sent home an estimated USD 366 million in the first six months of this year, according to new data from the Ministry of Labor and Social Welfare.Officials reported steady growth in labor migration over the past five years, with 350,567 Lao citizens working abroad between 2021 and 2025. Of the remittances sent home this year, USD 32.5 million was transferred through formal banking channels, including USD 8.3 million via Indochina Bank and USD 24.2 million through the Lao Foreign Trade Bank. Nevertheless, the official did not disclose the destination of the remaining amount.During a meeting on 25 November, Vanny Keovongxay, Deputy Director of the Department of Employment, noted that overseas employment continues to provide important economic opportunities for Lao workers, while remittances remain a critical source of income for households and national development. She added that the ministry will continue coordinating with partner governments and domestic agencies to strengthen safe, legal, and productive pathways for Lao citizens seeking work in countries such as Thailand, Japan, and South Korea.Migration Driven by Global Trends, Local ChallengesAccording to officials, labor mobility is increasingly shaped by global economic pressures and shifting livelihoods. The search for higher wages, improved living conditions, and greater financial security is a major driver of migration worldwide.Despite the opportunities available, the authorities also warned that migrants still face unsafe working conditions, exploitation, rights abuses, and risks related to human trafficking. Support services for workers have increased nationwide. There are now 48 employment service enterprises, 18 provincial service centers, 41 district-level job service points, six migrant information centers, and one migrant worker assistance center operating across the country.

28 Nov, 2025

Inflation in Laos Soars to 4.8 Percent in November

Laos’ inflation rate rose to 4.8 percent in November, up from 4.3 percent in October, driven mainly by higher costs for electricity, water, health care, and education, according to the Lao Statistics Bureau. The increase reflects ongoing price pressures from earlier in the year, along with a lower base in November.Housing, water, electricity, and cooking fuel costs rose by 18 percent, driven largely by a 101.7 percent surge in electricity prices and a 40.1 percent increase in water bills. Health care and medicine prices climbed 13.5 percent, led by higher costs for patient services and serums. Education expenses increased 11.6 percent, including an 18.8 percent rise in tuition fees and a 14.3 percent increase in student uniforms.Clothing and footwear prices were up 9 percent, with women’s clothing jumping 23.8 percent. Household appliances rose 7 percent, while alcohol and tobacco prices increased 7.2 percent. Other goods and services saw a sharp 26.4 percent rise, including a 52.9 percent increase in finished goods.Some categories, however, showed signs of easing. Food and non-alcoholic beverages fell by 1.8 percent month-on-month, with fresh onions down 22.6 percent, pork 4.1 percent, and beef and buffalo meat 3 percent.The report noted that November’s inflation reflects both rising costs, such as electricity, oil, and water, and currency depreciation, along with the cumulative effect of price increases earlier in 2025.