(KPL) The Standing Committee of the National Assembly on June 9 praised the government’s economic performance in the first half of 2025, reporting a 4.5% GDP growth. However, it has called for urgent reforms in the second half of the year to tackle inflation, infrastructure issues, and revenue collection challenges.

According to the committee’s mid-year review, the industrial sector performed above expectations, growing 4.7% compared to the planned 4.3%. Foreign investment surged to USD1.26 billion, marking a 52% increase year-on-year, largely driven by projects in industrial farming and import-substitution industries.

The government also collected 32,599 billion kip in revenue during the first six months, meeting 48% of its annual plan and projecting to reach over 54% by mid-year. Tourism exceeded expectations, with over 10 million visitors since late 2024, generating an estimated $2 billion in revenue.

Efforts to contain inflation have shown results, with tighter monetary policies pushing inflation toward single digits. Progress was also noted in the social sectors, including expanded access to education, improved teacher training, better healthcare infrastructure, and increased social protection.

Despite these gains, the committee raised serious concerns about several economic vulnerabilities. High inflation and a weakened national currency continue to pressure households and businesses, while foreign exchange reserves currently cover only five months of imports.

Infrastructure decay, especially deteriorating roads, remains a critical issue, exacerbated by overloaded transport vehicles and slow repair efforts. The mineral sector is experiencing significant revenue leakage, and modernization of the tax system remains sluggish. Challenges also persist in agriculture, healthcare staffing, and the viability of health insurance and social protection systems.

Budget implementation has been slow, with only 31% of planned state spending executed by mid-year, and delays in resolving project-related debts.

In response, the Standing Committee issued eight key recommendations to guide government action in the second half of 2025. These include curbing inflation and stabilizing prices of essential goods, accelerating infrastructure repairs, promoting domestic production and reducing reliance on imports, and strengthening revenue collection by modernizing systems and plugging leaks—particularly in the mining sector.

The committee also emphasized the need to stabilize the national currency by encouraging the use of the kip, tightening foreign exchange controls, and ensuring at least 70% of export earnings are repatriated. It urged the government to crack down on illegal mining, expedite renewable energy projects, and address shortages of teachers and doctors. Additionally, officials were called upon to enhance the efficiency of health insurance and take decisive action on drug and smuggling-related issues.

Finally, the committee stressed the importance of accelerating state investment budget allocations and resolving outstanding project debts to support ongoing development.

The Standing Committee endorsed the government’s plan for the second half of the year but underscored the urgency of addressing these pressing challenges to meet Laos’ socio-economic targets for 2025.

KPL