Govt targets annual economic growth of 5 percent over next five years

The Lao government has announced an ambitious target of pursuing annual economic growth of no less than 5 percent over the next five years (2026-2030), up from the average of 4.42 percent expected for the previous five years.
The target was defined in the draft 10th five-year National Socio-economic Development Plan (2026-2030), which is being built on the 9th five-year plan (2021-2025).

Dr Phet Phomphiphak. Photo National Assembly.

As Laos is concluding its current 9th five-year plan, the country has witnessed many economic indicators showing signs of recovery after years of economic hardship due to domestic challenges, the Covid-19 pandemic, natural disasters, and conflicts in parts of the world.
Inflation dropped to 8.3 percent in May – the first single-digit rate since May 2022 – while improved revenues, agriculture, processing, and mining, rebounding tourism, rising exports and services have sent positive signals to further boost the recovery.
Presenting the draft five-year National Socio-economic Development Plan to members of the National Assembly (NA) on Tuesday, the Minister of Planning and Investment, Dr Phet Phomphiphak, said the government will strive to arrest inflation further.
He said growth in the next five years will be driven by energy, agriculture, mining, services, logistics, tourism, industrial processing, and the digital economy.
The government wants to diversify its energy sources by developing nuclear power in addition to renewable hydropower, wind, solar and biomass energies, according to the minister.
The plan is to deliver “low cost energy and ensure sufficient domestic supply and even export”, he told lawmakers at a meeting in Vientiane.
The weeklong sitting, which will last till Friday, is a lead up debate preparing for the 9th Ordinary Session of the NA’s 9th legislature scheduled for June 9-26.
The government justified its intention to diversify energy sources on the grounds that the country could potentially face a power shortage as huge volumes of hydropower generated by foreign-invested projects are exported, which is motivated by higher prices. Lawmakers have expressed support for the move.
Efforts will be amplified to promote agricultural and mineral processing to add value to products.
Dr Phet said a plan is in place to expand transport and logistics connectivity with the region and beyond, and expressways will be built to connect key provinces and the capital Vientiane with China and Hanoi in Vietnam.
Detailed feasibility studies will be carried out for railway projects to link Vientiane with Vung Ang seaport in Vietnam’s central Ha Tinh province, and to connect Vientiane with Champassak province bordering Cambodia, thus establishing new economic corridors.
The minister said these projects will bolster industry and tourism, which have already benefited from the Laos-China Railway and improved transport networks.
Focus will also be placed on developing digital infrastructure and a digital ecosystem, including big data and high speed internet, to drive the digitial economy, along with improving public services.
As economic and financial hardship and high inflation have hit Laos for several years, undermining public spending including on education, the draft five-year plan pledged greater investments for human resource development to increase school enrollment amid a high dropout rate.
The five-year plan, being drafted under the theme of “Accelerate building an independent and self-relient economy, leveraging all potentials effectively, develop socio-economic in a green and sustainable manner”, spans a transition period when Laos intends to graduate from the “least developed country” status by 2026.
If it goes as planned, the gross domestic product (GDP) per capita of the more than seven million Lao people will touch US$2,983 (more than 64.3 million kip) and gross national income (GNI) per capita will reach US$2,800 (more than 60.3 million kip) by 2030.
To attain the goals, the five-year plan needs a total investment of 523,504 billion kip, accounting for 20.2 percent of GDP.
Other key targets of the draft five-year plan include:
Average agriculture growth of 4.4 percent, accounting for 21.30 percent of the GDP,
- Industrial growth of 5.1 percent (31.50 percent of GDP),
- Services expansion of 5.6 percent (36.80 percent of GDP),
- Tariff and tax expansion of 3.6 percent (10.40 percent of GDP),
- Revenues of 530,900 billion kip (20.5 percent of GDP),
- Expenditure of 506,540 billion kip, not exceeding 19.6 percent of the GDP
- State treasury is between 3,500 billion kip and 4,500 billion kip,
- Increase forest cover to 70 percent.

By Souksakhone Vaenkeo
 (Latest Update June 5, 2025)