Vientiane: Minister of Finance Santiphap Phomvihane presented an optimistic economic update to the 9th Ordinary Session of the National Assembly on June 10, 2025, highlighting steady growth and improved fiscal performance in the first half of 2025.
According to Lao News Agency, the government is implementing stronger policies to attract both domestic and foreign private investment, while intensifying efforts to mobilize development assistance. These measures are aimed at ensuring successful delivery of the National Socio-Economic Development Plan during the remainder of the year.
Preliminary figures indicate that the Lao economy grew by 4.5 percent in the first quarter of 2025. Sectoral growth included 3.1 percent in agriculture, 4.7 percent in industry, 4.7 percent in services, and 4.3 percent in taxes and duties.
As of June 6, 49 percent of the annual state budget had been executed, with internal revenue collection reaching 31.89 trillion kip, or 51 percent of the full-year target. This reflects positive momentum supported by stabilizing exchange rates and falling inflation, which have helped stimulate domestic economic activity and business recovery.
Local governments are also performing well, with five provinces surpassing 70 percent of their mid-year fiscal targets. If this trend continues, the 2025 national budget could exceed its goal for the fifth consecutive year.
The services sector contributed 50.8 percent of total internal revenue-a 70.3 percent increase from the previous year-driven largely by electricity generation (20.4 percent) and the banking, finance, and insurance sectors (6.4 percent).
Debt recovery efforts showed progress, with 25 percent of the annual target-amounting to 631 billion kip-collected in the first six months. Of that, state-owned enterprises repaid 537 billion kip, while two state banks repaid 86 billion kip. However, recovery is expected to reach only 50 percent of the target due to persistent challenges, particularly in the energy sector.
To address this, the government will strengthen follow-up mechanisms and focus recovery efforts on Electricit© du Laos (EDL), which is currently restructuring electricity tariffs to stabilize its financial position and improve debt servicing capacity.
The finance minister’s report underscores the country’s economic resilience and a positive trajectory, as ongoing reforms and better fiscal management continue to support national development goals.
