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Economic growth

Laos Seeks Steady Economic Growth Amid Declining Inflation

Strategic Insights

— 1 min read

Lao families are showing signs of relief as the country's economy continues to stabilize, with inflation dropping significantly since the first half of the year. The central bank's decision to reduce the seven-day basic interest rate from 9.5 percent to 9 percent aims to ease financial pressure on businesses and households, supporting economic growth. This move marks the third rate cut in 2025, following reductions in March and June, and comes as inflation continues to fall, from 5.3 percent in July to 5 percent in August.

Key Takeaways:

  • The Lao central bank has reduced its seven-day basic interest rate from 9.5 percent to 9 percent to ease financial pressure on businesses and households while supporting economic growth.
  • This marks the third rate cut in 2025, following reductions from 10.5 percent to 10 percent in March and to 9.5 percent in June.
  • Inflation continues to decline, dropping from 5.3 percent in July to 5 percent in August, after averaging over 10 percent in the first half of the year.
  • The country's GDP is estimated to grow by 4.5 percent in the first six months of 2025, with a positive economic outlook in the third quarter of 2025.
  • The Lao government is pushing to build an independent and self-reliant economy, emphasizing increasing revenue, controlling public expenditure, and enhancing financial management.
  • Small businesses and vendors, such as Sengdao and Khim, are hopeful that the improving economic trends will bring lasting benefits to Lao citizens, including increased consumer spending and job opportunities.

Statistics:

  • The seven-day basic interest rate was reduced from 9.5 percent to 9 percent.
  • Inflation dropped from 5.3 percent in July to 5 percent in August.
  • The country's GDP grew by an estimated 4.5 percent in the first six months of 2025.
  • Inflation averaged over 10 percent in the first half of the year.
  • The rate cuts in 2025 include:

+ Reduction from 10.5 percent to 10 percent in March.

+ Reduction from 10 percent to 9.5 percent in June.

+ Reduction from 9.5 percent to 9 percent in September.

Sources:

  • Vientiane, September 18, 2025 (Xinhua via COMTEX)
  • COMTEX_468858513/2084/2025-09-18T07:09:04 Copyright 2025 XINHUA NEWS AGENCY

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