Prime Minister Sonexay Siphandone delivers a report at the start of the ordinary session of the National Assembly on Monday. --Photo Sangkhomxay

Economy set to grow 4.8 percent in 2025, PM tells National Assembly

The economy is projected to grow by 4.8 percent this year, reflecting continued recovery and resilience despite domestic and external challenges, the Prime Minister told participants at the 10th Ordinary Session of the 9th Legislature of the National Assembly that kicked off on Monday.
Prime Minister Sonexay Siphandone’s report was presented shortly after opening remarks by National Assembly President Dr Xaysomphone Phomvihane, who is chairing the session, which runs from November 10-21.
Other dignitaries in attendance included President Thongloun Sisoulith and senior current and former Party and State leaders, alongside other members of government, foreign diplomats, and representatives of international organisations in Laos.
Assembly members will debate drafts of the state budget and monetary plan for 2026, adjustments to the 2025 budget, and the progress made in fulfilling national agendas to tackle economic and financial problems and the drug trade.
Delivering a government report on the implementation of the 9th National Socio-Economic Development Plan for 2021-2025, the premier said the government had focused on implementing resolutions relating to the 11th Party Congress’ 12 priority measures aimed at resolving financial challenges and sustaining growth momentum.
Despite numerous problems, the economy has grown in line with the targets set out in the five-year plan, averaging 4.24 percent annual growth.
The main drivers of growth were the increased production of crops for domestic consumption and export, electricity generation, mining, the processing industry, transport, and tourism.
Over the five-year period, the agriculture sector expanded by an average of 2.9 percent, accounting for 19.4 percent of GDP, surpassing the targets of 2.5 percent growth and 15.3 percent of GDP.
The industry sector grew by 4.7 percent, accounting for 32.5 percent of GDP, slightly above the projected 4.1 percent and 32.3 percent, while the services sector expanded by 4.5 percent, contributing 36.6 percent of GDP, but below the planned figures of 6 percent and 41.3 percent respectively.
Net product taxes increased by 3.8 percent, accounting for 11.5 percent of GDP, but also fell short of the target.
Prime Minister Sonexay said growth in the services sector and tax revenue fell short due to the lingering effects of the COVID-19 pandemic and extreme weather conditions, which disrupted production and business activities.
External factors such as regional economic volatility and slower recoveries in neighbouring economies also affected Laos’ performance.
Domestically, financial constraints have created pressure on the kip, causing inflation and a spike in the price of imported goods. This has seen the cost of living soar and prompted many people to seek jobs in other countries.
Despite these challenges, the Prime Minister reaffirmed the government’s determination to stabilise the macroeconomy, strengthen financial systems, and pursue sustainable and inclusive growth.
The report creates the basis for the draft 10th NSEDP (2026-2030), which will guide the country’s next stage of development on the path to an independent, self-reliant, and green economy.

By Bounfaeng Phaymanivong
(Latest Update November 11, 2025)