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Headlines:
Inflation Eases as Economy Inches Forward
ADB Forecasts 3.7% Growth
Road, Rail and Waterway Upgrades
Vientiane-Boten Expressway on Track for 2030
Tourism Dream Targets 43 Million Peeps by 2030
Luang Namtha Becomes Conservation Destination
Electricity Prices Adjusted, End to Free Power
Golden Triangle SEZ Promises Safety Overhaul
‘Three Hubs’ Digital Vision
The Real Cost of Banana and Durian
HR Review Report Adopted at UN Meeting
Inflation Eases as Economy Inches Forward
Inflation in Laos gave everyone a little relief last month as it eased a little to 4.5% in down from 5% the month before. The Consumer Price Index stands at 256.9, an increase of nearly 11 points compared to the number this time last year. Government revenue came in at about $2.16 billion, achieving 69% of the 2025 target (~75% of the way through the year). Agricultural exports were a big contributor; crop and vegetable exports came close to 325,000 tons valued at more than USD 88 million. Growth forecasts (next article) show that we should expect moderate growth rates of 3.5% to 4.4%, with the biggest worry now the painfully high level of public debt.
Read more: Laotian Times (Economic Data), The Star (Inflation Breakdown)
ADB Forecasts 3.7% Growth
The Asian Development Bank (ADB) says we should expect 3.7% growth for Laos this year, a number that they’ve revised down due to debt vulnerabilities and weak demand. Services are expected to be the primary engine of growth at 4.5%, supported by tourism (2.3 million arrivals in H1 2025 - keep that number in mind for later when we look at the 2030 forecast). Industry sector growth is forecast at 3.6%, supported by energy and manufacturing; agriculture growth will come in modestly at 1.3%. External debt service costs reached $533 million by mid-year.
Read more: ADB
Road, Rail, and Waterway Upgrades
The government released a five-year transport strategy to improve the national transport infrastructure. The plan is to upgrade 500 km of highways, increase rail links with Vietnam and Thailand, and expand dry ports (expected in Thakhek, Huayxai, and Luang Prabang) to improve connectivity and grease trade. Some of the highlight projects include upgrades to National Road No. 13 South and the building of bridges on National Roads No. 8 and 20. The Ministry of Public Works and Transport says it will crack down on overweight trucks and generally improve expressway management.
Read more: Laotian Times (Transport Strategy), Laotian Times (Expressway Completion)
Vientiane-Boten Expressway on Track for 2030
Deputy Prime Minister Saleumxay Kommasith announced the expected completion of the Vientiane-Boten Expressway by 2030 during a ceremony on September 24. The expressway will connect the capital to Boten in Luang Namtha Province, under the Laos-China cooperation framework. The project extends the road from the existing Vientiane-Vang Vieng section, and will run about 440 kilometers when it’s done. The improvements have already reduced travel time from Vientiane to Vang Vieng from 3.5 hours to a single hour.
Read more: Laotian Times
Tourism Dream Targets 43 Million Peeps by 2030
Minister of Culture and Tourism, Suansavanh Viyaket, announced an astonishing target of 43 million tourists by 2030 during the Party Congress, saying that such an achievement would bring in $13 billion in revenue. The plan includes luring 21 million domestic and 22 million international travelers. Huge investments will be needed if the country is to get anywhere close to those numbers. For 2025, Laos expects to roll out the welcome mat for 4.3 million international visitors.
Read more: Travel and Tour World (Tourism Target), The Star (Revenue Hopes), Travel and Tour World (Tourism Appeal)
Luang Namtha Becomes Conservation Destination
The Lao government and a Chinese company are working together on the Xang Boten Tourism Project to create a premier eco-friendly travel destination in Luang Namtha Province. The project, officially signed on September 19, is centered on sustainability and community involvement and is expected to benefit local communities by creating jobs and supporting the economy while keeping natural resources and biodiversity intact.
Read more: Travel and Tour World
Electricity Prices Adjusted, End to Free Power
The government announced new electricity rates that are effective this month, and will raise costs for households by 0.7 US cents per kilowatt-hour. The free electricity program for households using up to 25 kilowatt-hours per month has ended, which will be (another) burden on the (poorest) low-usage consumers. Electricité du Laos (EDL) will continue negotiating with independent power producers to try to reduce their electricity purchase costs. New projects will promote renewable energy sources and try to raise public awareness of energy conservation. The announcement, unsurprisingly, got immediate and vociferous backlash on social media.
Read more: Laotian Times
Golden Triangle SEZ Promises Safety Overhaul
After a recent visit from diplomats and international organizations, the Golden Triangle Special Economic Zone (SEZ) in Bokeo province is making noise about becoming a “modern city.” To get there, it is promising its work on safety and its investment appeal. Gao Rong, Vice Chairman, said that the Kings Romans Group’s “Replacement Economy” plan supports a turn from opium cultivation to other sustainable businesses. Set up in 2007 and now covering an area of 3,000 hectares, the SEZ is now home to more than 2,400 businesses with US$1.5 billion in registered capital. Most of the investment so far has come from China, Laos, and Singapore, and its become a multicultural hub of 65,000 residents. Annual tourist visitors number between 500,000 and 600,000.
Read more: The Star
‘Three Hubs’ Digital Vision
Laos wants to find growth in digital technology, green energy, and regional connectivity with its ‘Three Hubs’ vision. Deputy Minister of Technology and Communications, Saysana Sitthiphone, represented Laos at conferences in Nanning, China on September 15-19 to discuss the plans.
Read more: The Star
The Real Cost of Banana and Durian
An investigation into the banana and durian industries showed worrying issues of environmental degradation and overproduction. Economic pressures are causing in environmental neglect, allowing for the expansion of Vietnamese and Chinese agricultural companies that want to profit from Chinese demand. Data sources, including satellite imagery and corporate databases, show increased deforestation and soil degradation that’s linked to these plantations. Soil testing found evidence of compaction and depletion on lands that were previously used for banana monoculture, indicating adverse effects from monocropping for too long.
Read more: GIJN
HR Review Report Adopted at UN Meeting
Laos adopted its Fourth Cycle Universal Periodic Review report at the UN Human Rights Council at the 60th Session in Geneva on September 25-26. The Lao delegation, led by Ambassador Daovy Vongxay, came out in support of 189 recommendations, partially supported seven, and took note of 61 others. Of the 189 proposals that were given support, many are already being implemented according to the Lao Constitution and existing laws.
Read more: The Star
That’s all for this week, thanks for reading.
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