In the first nine days of the 9th national assembly, which will continue through 26 June, Prime Minister Sonexay Siphandone and senior cabinet members delivered a sweeping update on the government’s efforts to address Laos’ deepening economic challenges.
From surging inflation and mounting public debt to volatile exchange rates and rising living costs, the government has laid out a comprehensive response aimed at stabilizing the economy and easing the burden on citizens.
Inflation, Cost of Living Take Center Stage
A major topic in the Prime Minister’s address on 11 June was the government’s firm commitment to reducing inflation to single digits by the end of 2025.
To achieve this, authorities are focusing on stabilizing the value of the kip through tighter currency exchange controls and by strengthening foreign currency reserves.
Prime Minister Sonexay emphasized plans to ramp up domestic production and reduce dependency on imports, in a bid to not only control prices but also safeguard household purchasing power.
To address the ongoing volatility in commodity prices and growing concerns over market manipulation, the government pledged to tighten regulatory oversight.
Efforts will be made to eliminate unjustified price gaps created by middlemen and to enforce fair pricing practices that protect consumers.
In response to increasing utility costs, particularly electricity prices affecting low-income households, the government is currently reviewing electricity tariffs. Special support measures are being considered for civil servants, security personnel, and vulnerable groups to cushion the impact of rising living expenses.
Debt Management, Revenue Reforms in Focus
On 10 June, the Prime Minister reaffirmed the government’s commitment to responsible public debt management.
Despite growing debt pressures, Sonexay stated that Laos will continue to honor existing obligations while pursuing potential restructuring arrangements with select creditor nations.
Encouragingly, a portion of the central government’s 2024 budget surplus, estimated between LAK 500 and 800 billion (around USD 23.3 – 37.3 million), will be used to repay overdue public investment debts, helping to prevent default and restore fiscal confidence.
To address revenue shortfalls, the government plans to modernize tax and customs collection, particularly at border checkpoints. Additional measures include strengthening the collection of land taxes and service fees, along with tighter controls on public spending to reduce waste.
Finance Ministry Clarifies Repayment Progress
Meanwhile, Minister of Finance Santiphab Phomvihane addressed lawmakers’ concerns regarding low debt repayment figures mid-year. He clarified that the majority of repayments are scheduled for the latter half of 2025.
As of early June, 13.54 percent of the year’s domestic debt obligations had been fulfilled, with total repayments expected to reach 33.54 percent of the annual target by the end of this month.
By 30 June, repayments are projected to hit LAK 20,525 billion (USD 957.7 million), 96.61 percent of the six-month target. While some delays have occurred due to documentation issues from bondholders, the Finance Ministry remains confident in meeting its year-end goals.
In terms of debt recovery, approximately LAK 631 billion (USD 29.4 million) has been collected so far this year, amounting to 25 percent of the 2025 target. However, the underperformance of major state enterprises, particularly Electricité du Laos (EDL), remains a point of concern.
To address this, the government is planning to restructure EDL’s debt and revise electricity tariffs to improve the company’s ability to repay its obligations.
With two more weeks of deliberations ahead, the National Assembly’s mid-year session has already seen significant policy commitments from the government across inflation control, debt reduction, and economic stabilization.
As discussions continue, lawmakers and citizens alike are closely monitoring whether these pledges will lead to tangible improvements in everyday life and pave the way for long-term growth.
With two weeks left in the session, the government has already made key promises on inflation, debt, and the economy. Lawmakers and the public are now watching to see if real progress will follow.