Deputy Prime Minister and Minister of Finance Santiphab Phomvihane chairs a high-level meeting of finance officials on Tuesday.

Finance sector sees steady Q1 growth, warns of rising inflation

Laos’ economy grew 5.5 percent in the first quarter of 2026 while inflation eased to 7 percent, down sharply from the 13.1 percent recorded in the same period last year.
However, finance officials warn that spiralling fuel costs could drive prices higher in the coming months.
The figures were presented at a high-level meeting of finance officials on Tuesday, chaired by Deputy Prime Minister and Minister of Finance Santiphab Phomvihane to review progress made under the National Socio-Economic Development Plan and the National Budget Plan for Q1, and set the agenda for the second quarter of 2026.
The meeting brought together cabinet members, departmental heads from line ministries, provincial finance departments, and National Treasury personnel from across the country, both in person and online.
Officials said inflation is expected to rise in Q2 after fuel prices doubled from late March, increasing production costs and the price of goods and services.
Despite mounting external pressures, several key macroeconomic indicators showed initial improvement. Revenue collection exceeded targets, reaching 112 percent of the Q1 plan—equivalent to 52 percent of the initial six-month plan, 28 percent of the plan for the whole of 2026, and 5.68 percent of GDP, marking a 15 percent increase compared to the same period last year.
Budget expenditure reached 41 percent of the quarterly plan, equivalent to 21 percent of the initial six-month plan and 11 percent of the total target figure for 2026.
Mr Santiphab said the government will push for a “new breakthrough” in rolling out its plans for 2026, aiming to create an independent and self-reliant economy.
This approach centres on ensuring that domestic revenue covers regular expenditure while generating surplus funds to service both domestic and external debt, with the aim of strengthening fiscal sustainability and building buffers against future shocks.
The meeting enabled participants to hold in-depth discussions and suggest ways to resolve outstanding issues and challenges.
This year sees the beginning of the implementation of the government’s 10th five-year National Socio-Economic Development Plan for 2026-2030. Officials said that while progress has been made in the first quarter of this year, the economy remains fragile and continues to face both opportunities and challenges.
Authorities said the prolonged crisis in the Middle East has had a significant negative impact on the country’s development plans, creating further economic headwinds.
In addition, officials cited natural disasters, including storms affecting parts of Vientiane and several provinces, as additional barriers to development plans.
They cautioned that despite stable Q1 indicators, the economy remains vulnerable, with rising fuel costs, climate-related disruptions and global uncertainties expected to pose continued challenges in the months ahead.

By Times Reporters
 (Latest UpdateApril 23, 2026)