Lao People’s Democratic Republic (Lao PDR) has made significant headway on its development
path over the past three decades. The country’s sustained economic growth has been
led by booming commodity exports and substantial inflows of external financing. Many
Laotians have seen significant improvements in their well-being. Poverty has declined
as household income has increased, and many important development goals in education
and health have been achieved.
In the face of macroeconomic challenges, a shift from commodity-driven growth to a
more inclusive prosperity paradigm that emphasises the creation of broad-based opportunities,
human capital development and green sustainability can unlock Lao PDR’s future development.
This report presents priorities for overcoming the country’s current fiscal constraints
and finding ways to fund this shift. Recommendations address strengthening Lao PDR’s
sustainable finance and debt management, revenue generation and tax reform, investment
promotion, and data capacity in order to tap into green finance mechanisms.