Lao PDR’s economy has shown encouraging signs of stabilization. While growth remains moderate, inflation has eased to single digits, and the kip has become more stable, supported by tighter monetary and fiscal policies, as well as the implementation of foreign exchange measures. Strengthened revenue collection and contained spending underpins fiscal surpluses and lower public debt.
Notwithstanding recent gains, high external debt service, reliance on short-term borrowing from domestic banks, and fiscal risks from state-owned enterprises continue to weigh on the country’s outlook amid global uncertainties.