Economic indicators show signs of recovery amid global uncertainty

The Lao government has observed encouraging signs of economic recovery, despite ongoing domestic economic difficulties and global turbulances.
Inflation dropped to 8.3 percent in May, marking the first single-digit rate since May 2022. This reflects a steady decline over 11 consecutive months since June last year, easing the price hikes that had affected the country for years.
Improved revenue collection also supported fiscal operations, with government earnings reaching 93 percent of the first half-year target, amounting to 31,773 billion kip. However, expenditure reached only 56.26 percent, or 21,682 billion kip, of the planned budget.

Prime Minister Sonexay Siphandone.

“The government will strive to meet or exceed its revenue targets,” the government spokesperson Sonexay Sitphaxay told local media on Friday following the two-day cabinet meeting for May.
Exports (excluding electricity) rose 16.2 percent from the previous month to over US$662 million (14,284 billion kip), resulting in a trade surplus of over US$14 million (302 billion kip). Increased exports have strengthened foreign reserves, now sufficient to cover at least five months of imports.
“Debt servicing for both domestic and external obligations is proceeding as planned,” added Mr Sonexay, who also serves as Minister to the Prime Minister’s Office.
Chaired by Prime Minister Sonexay Siphandone, the monthly cabinet meeting reviewed implementation of the socio-economic development plan and expected performance for the first half of 2025 and preparations for the second half. The government has set a growth target of 4.8 percent this year, up from 4.6 percent in 2024.
The cabinet noted that efforts to ramp up domestic production and reduce imports are gaining momentum, as Laos is becoming largely self-sufficient in producing staple foods to meet domestic consumption needs. Meanwhile, tourism continues to rebound, thanks to improved transport networks and promotional campaigns under the Visit Laos Year 2024 initiative. Foreign tourist arrivals rose by 21 percent year-on-year to 4.12 million, generating US$1.13 billion in revenue.
The cabinet also discussed measures to further develop transport infrastructure. Key projects include the nearly completed bridge across the Mekong River linking Lao Xayaboury and Bokeo provinces, and the Fifth Lao-Thai Friendship Bridge connecting Borikhamxay province with Thailand’s Bueng Kan province, set to open by year-end. These projects are expected to boost trade and regional connectivity.
Efforts are underway to enhance passenger and freight transport, leveraging the Laos-China and Laos-Thailand railways and the Thanaleng Dry Port - Laos’ integrated logistics hub.
Investment promotion remains a priority with effort being accelerated to improve the business environment. In May alone, seven new projects were approved, worth more than 9,244 billion kip and US$3 million (more than 64 billion kip).
Looking ahead, the cabinet outlined key actions for the coming months, including strengthening foreign reserves, centralising foreign currency exchange, prioritising essential imports, monitoring goods price in local markets, and enhancing revenue collection mechanisms.
Other priorities include regulating movement of and certifying concentration of minerals, repairing disaster-hit infrastructure, expanding vocational training, and creating jobs.
To support long-term growth and stability, the cabinet approved in principle seven strategic documents. These include draft strategies on state finance through 2035 and a vision for 2040, as well as draft decrees on direct borrowing, One District One Product, startup promotion, and tourism attraction management.
The draft Five-Year National Socio-Economic Development Plan for 2026–2030 was also presented at the meeting.

By Souksakhone Vaenkeo
 (Latest Update June 2, 2025)