Vientiane: The World Bank (WB) has projected that Laos is on track to graduate from the group of least developed countries (LDCs) by 2026. This forecast highlights positive signs of macroeconomic recovery, while the WB emphasizes the importance of maintaining reforms and reducing reliance on international aid.

According to Lao News Agency, the latest WB report on the Lao economy anticipates a GDP growth rate of 4.2% in 2025. This growth is expected to be fueled by a resurgence in tourism, transport services, and the continued expansion of the resource sector. Additionally, inflation has significantly decreased, dropping from 24.5% in 2024 to 8.5% in the first ten months of 2025, which has contributed to restoring investor confidence and alleviating pressure on living costs.

The report further outlines that Laos' foreign exchange reserves increased to 2.8 billion USD by September, bolstered by a current account surplus. Furthermore, the country's return to international bond markets in November has helped ease medium-term debt repayment pressures.

Mukdavanh Sisoulith, the Director General of the International Organisations Department at the Lao Ministry of Foreign Affairs, confirmed that Laos has met all three United Nations criteria for LDC graduation, with an official exit expected by the end of 2026. However, she warned that this transition will lead to a reduction in official development assistance (ODA) and the loss of certain trade preferences.

To navigate this transition, the Lao Government has devised a strategic reform plan concentrating on five key areas, including revenue mobilization through tax reforms and the reintroduction of a 10% value-added tax. The WB underscored the importance of effective road infrastructure management in strengthening the Lao economy, particularly due to the country's landlocked status and the crucial role of transport networks in determining logistics costs and competitiveness.