The Lao PDR’s economy is expected to maintain its recovery from the COVID-19-pandemic in 2023. However, currency depreciation and surging inflation are challenges to sustaining the economic recovery. Ensuring tighter discipline in fiscal and monetary policies is essential to re-establish macroeconomic stability.
Lao PDR’s economic growth is projected to accelerate to 4.8 percent in 2023 from 4.4 percent in 2022, bolstered by the service sector. Following the full reopening of borders and the operation of the high speed Lao-China railway, the tourism and logistics sectors benefitted from enhanced connectivity with neighboring countries, especially China. Inflation surged to 23 percent year-on-year in 2022, driven by rising food and fuel prices, and is projected to average about 30 percent in 2023.
These conclusions are highlighted in the 2023 Annual Consultation Report on Lao PDR.