21 Jan, 2026

Laos Inflation Falls to 7.7% in 2025, Showing Signs of Economic Stabilization

Laos’ average inflation fell to 7.7 percent in 2025, down sharply from 23.13 percent in 2024, according to the Bank of the Lao PDR (BOL), marking a significant easing in price pressures.The central bank presented the figures during a public meeting on 14 January. Officials said the improvement reflects greater price stability, supported by a relatively stable exchange rate and foreign exchange reserves sufficient to cover more than six months of imports, in line with national targets.Beyond inflation and liquidity trends, the central bank reported advances in institutional reforms. These include steps toward transforming the bank into a rural development-oriented institution and expanding cross-border payment system integration with neighboring countries, aimed at improving financial access and supporting economic activity.However, officials cautioned that challenges remain. Some economic targets approved by the National Assembly have yet to be fully met, and many households continue to face financial pressure.Previous reporting shows why the cost of living remains a concern. Although inflation eased in 2024, the National Statistics Bureau reported that the Consumer Price Index rose from 208.3 to 243.5, driven mainly by higher spending on essentials such as food, healthcare, and utilities.Healthcare and medicine were the largest contributors to rising costs in 2024 due to higher prices for imported medical supplies, while electricity, water, and cooking gas costs also increased. As a result, despite further inflation easing in 2025, everyday expenses remain elevated for many households.To address these pressures, the meeting reviewed the implementation of the 2025 Monetary Plan and discussed policy priorities for 2026, focusing on strengthening monetary management, maintaining financial stability, and supporting national economic objectives.

16 Jan, 2026

Laos Targets 6 Percent Economic Growth in 2026 Amid Reforms, Election Preparations

The Lao government has set a target of at least six percent economic growth in 2026, supported by fiscal reforms, major infrastructure projects, and preparations for national elections, officials said.Government Spokesperson Sonexay Sitphaxay announced the target on 13 January following the Second Enlarged Government Meeting held from 12 to 13 January.A key pillar of the 2026 agenda is strengthening public finances. Authorities aim to raise state revenue to at least 20 percent of gross domestic product through reforms to modernize tax and revenue collection systems.Officials said the measures are intended to close tax gaps, improve compliance, and increase efficiency.Inflation control remains a priority after consumer prices declined from a peak of 31.23 percent in 2023 to 23.13 percent in 2024 and 7.7 percent in 2025.The government is implementing policies to stabilize the exchange rate, strengthen the Lao kip, and expand the use of local currency in regional trade.Infrastructure and Energy DevelopmentAlongside fiscal measures, the government is emphasizing infrastructure development as a long-term driver of growth and regional integration.Several large-scale projects have been approved or are moving into early implementation stages.Among them is Phase I of the Laos–Vietnam railway, a 147-kilometer section linking Thakhek district to the Laos–Vietnam border in Khammouane Province under a build-operate-transfer model.The project is expected to complement existing rail connections with China and Thailand. Plans are also underway for a second railway bridge across the Mekong River linking Vientiane Capital with Thailand’s Nong Khai Province.Energy development remains another core pillar of the growth strategy, supporting both domestic demand and power exports to neighboring countries.The sector continues to attract investment in clean energy and cross-border transmission. Reflecting this push, Laos inaugurated a 1,000-megawatt solar power plant in Oudomxay Province in mid-December 2025, the largest such facility in the country to date.The government is also preparing for elections to the 10th National Assembly scheduled for 22 February, while continuing efforts to graduate from least developed country status in 2026.Under the 10th Five-Year National Socio-Economic Development Plan for 2026–2030, authorities are targeting average annual economic growth of at least six percent, with gross domestic product per capita projected to reach USD 3,104 by 2030.