Laos has successfully reduced public debt from 112 percent of GDP in 2022 to about 88 percent in 2025, Prime Minister Sonexay Siphandone said on 10 November.
Sonexay, speaking at the 10th Ordinary Session of the 9th National Assembly, also shared that authorities had focused on proactively implementing the state budget plan over the current five-year period, using a combination of measures to strengthen the fiscal system.
These reforms raised national revenue to 18.65 percent of GDP, exceeding the five-year target of 17 percent, and turned the budget from a 1 percent deficit of LAK 10.5 trillion (USD 483.2 million) into a 1.4 percent surplus of LAK 18.39 trillion (USD 846.2 million).
Ongoing measures such as debt-service negotiations, bond issuance, loan restructuring, and restrictions on ineffective new loans have further reinforced the country’s financial position.
The prime minister noted that although debt remains high, the government’s credibility has gradually improved.
Economic Growth Amid Global and Domestic Pressures
Turning to the broader economy, Prime Minister Sonexay projected GDP growth of 4.8 percent for the remainder of this year despite global and domestic challenges.
He reported that over the 2021–2025 period, the economy grew at an average rate of 4.24 percent, driven by higher crop production, electricity generation, mining, processing industries, transportation, and tourism.
The PM noted that the agriculture sector expanded by an annual average of 2.9 percent, accounting for 19.4 percent of GDP and surpassing the five-year growth target.
The industrial sector grew 4.7 percent, contributing 32.5 percent of GDP, slightly above projections, while the services sector increased 4.5 percent to make up 36.6 percent of GDP, below planned expectations.
Net product taxes rose 3.8 percent, representing 11.5 percent of GDP, also falling short of the target.
Facing Challenges, Planning Growth
Additionally, the prime minister attributed the weaker performance of the services sector and slower-than-expected revenue to lingering effects of the COVID-19 pandemic, extreme weather events, regional economic instability, and financial constraints that pressured the kip, contributed to inflation, and drove up the cost of imported goods.
He also noted that rising living costs have prompted many citizens to seek employment abroad.
Despite these challenges, Sonexay reaffirmed the government’s commitment to stabilizing the macroeconomy, strengthening financial systems, and promoting sustainable, inclusive development.


