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Lao PDR Economic Monitor, May 2025: Weathering Risks

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dc.contributor.authorWorld Bank
dc.date.accessioned2025-06-16T21:01:15Z
dc.date.available2025-06-16T21:01:15Z
dc.date.issued2025-06-16
dc.description.abstractIn 2024, the Lao economy grew by 4.1 percent, driven primarily by strong performance in the services sector, followed by electricity generation, mining, agriculture, and some manufacturing. Services expanded by an estimated 5 percent. Foreign tourist arrivals rose by 21 percent alongside increased domestic travel. Improved connectivity, particularly through land transport and railways, further boosted growth in transport and logistics services, supporting exports and tourism. Industry posted moderate growth, driven by higher electricity generation and increased production of electrical equipment. Agriculture remained resilient, supported by strong export demand for non-rice crops and livestock. On the demand side, growth was mainly driven by external demand, which has benefited export-oriented sectors. While domestic private demand remained constrained by weakened purchasing power due to inflation and currency depreciation, these pressures began to ease in the second half of the year amid a more stable exchange rate and slowing inflation. Looking ahead, Laos’ economic growth is projected to soften to 3.5 percent in 2025. Tourism and transport services are expected to grow, albeit more moderately, as the country gradually closes the COVID-19 gap and external demand slows. Oil and food price rises are expected to moderate, but external imbalances resulting from large external financing needs and uncertainty on sustainable foreign currency inflows could reintroduce pressure on the exchange rate and hence on inflation. Amid continued monetary and fiscal tightening, and softened demand-side pressures, inflation should continue to ease but will likely stay in double digits in 2025. Fiscal spending will remain tight despite improved revenue performance, with debt repayments peaking in 2025, elevating financing needs and limiting the room for essential public spending. Revenue collection is projected to strengthen, supported by policies such as the reinstatement of fuel excise rates and improvement in tax administration. However, with rising interest payments, expenditure growth should remain restrained, particularly for public services.en
dc.identifierhttp://documents.worldbank.org/curated/en/099052225232036650
dc.identifier.doihttps://doi.org/10.1596/43340
dc.identifier.urihttps://hdl.handle.net/10986/43340
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.rightsCC BY-NC 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/igo
dc.subjectECONOMIC GROWTH
dc.subjectINFLATION
dc.subjectTOURISM
dc.subjectFISCAL SPENDING CONSTRAINTS
dc.titleLao PDR Economic Monitor, May 2025en
dc.title.subtitleWeathering Risks
dc.typeReport
dspace.entity.typePublication
okr.date.disclosure2025-06-16
okr.date.doiregistration2025-06-18T02:09:50.548007Z
okr.date.lastmodified2025-06-01T15:07:06Zen
okr.doctypeEconomic & Sector Work::Economic Updates and Modeling
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/099052225232036650
okr.guid099052225232036650
okr.identifier.docmidP507388-c8df3b09-7fac-4a33-8344-c2e857e68395
okr.identifier.externaldocumentum40015225
okr.identifier.internaldocumentum40015225
okr.identifier.report201610
okr.import.id7690
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttps://documents.worldbank.org/curated/en/099052225232036650/pdf/P507388-c8df3b09-7fac-4a33-8344-c2e857e68395.pdfen
okr.region.administrativeEast Asia and Pacific
okr.region.countryLao People's Democratic Republic
okr.sectorCentral Government (Central Agencies),Trade
okr.sectorPublic Administration,Industry, Trade and Services
okr.themeBusiness Enabling Environment,Trade Facilitation and Trade Logistics,Data Collection and Data Acquisition,Trade Policy,Trade,Macroeconomic Model Development,Economic Policy,Collection of Data from Traditional Sources,Regional Integration,Business Regulation and Investment Climate Policies,Macro-financial policies,Exchange Rate Policies,Fiscal Policy,Private Sector Development,Macroeconomic Modeling,Data Ecosystem,Monetary and Credit Policies,Debt Management,Fiscal Risk Management,Debt Policy
okr.topicMacroeconomics and Economic Growth::Investment and Investment Climate
okr.topicInternational Economics and Trade::Trade Facilitation
okr.topicIndustry::Accommodation & Tourism Industry
okr.topicMacroeconomics and Economic Growth::Inflation
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.unitEFI-EAP-MTI-MacroFiscal-1 (EEAM1)
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