VIENTIANE (Xinhua): The Asian Development Bank (ADB) forecasts Laos' economy will grow by 4 per cent in 2026, rising to 4.5 per cent in 2027, as easing inflation and greater exchange-rate stability help restore confidence and support economic activity.
Despite projected economic growth, Laos remains vulnerable to external shocks, including higher global fuel and import costs, weaker external demand, limited fiscal and monetary policy space, and continued debt repayment pressures, according to the ADB's latest Asian Development Outlook (ADO), Socio-Economic News reported on Wednesday.
ADB Country Director for Laos Shanny Campbell said the country has made significant progress in restoring macroeconomic stability, with easing inflation and a more stable exchange rate supporting economic activity.
She said maintaining prudent macroeconomic policies, improving trade facilitation, diversifying exports, and integrating climate resilience into development planning will be important to sustaining an inclusive and resilient recovery.
The services sector remains a key driver of growth. International tourist arrivals reached 2.6 million in the first half of 2026, up 9.9 per cent from the same period last year.
The industrial sector is also expected to support growth, driven by investment in renewable energy, construction and mining, as well as electricity exports. Meanwhile, the agricultural sector is projected to contribute less.
Both agriculture and industry, however, face growing climate-related risks, including floods, droughts and erratic rainfall. These could affect agricultural production and future hydropower generation.
ADB also forecasts average inflation to ease from 8 per cent in 2026 to 6.5 per cent in 2027. -- Xinhua
