VIENTIANE, Sept. 18 (Xinhua) -- Laos is actively working to promote steady economic growth, with the economy showing signs of stabilization and inflation continuing to decline, bringing growing optimism among Lao families.
The Lao central bank has announced a reduction of its seven-day basic interest rate from 9.5 percent to 9 percent, aiming to ease financial pressure on businesses and households while supporting economic growth amid declining inflation. 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.
The decision is intended to make borrowing more affordable and stimulate domestic spending and investment. It comes as inflation continues to fall, dropping from 5.3 percent in July to 5 percent in August, after averaging over 10 percent in the first half of the year. This marks a significant improvement from 2023, when inflation soared to 40.3 percent, driven by the lingering effects of the COVID-19 pandemic and fuel and food price surges.
Minny, an office worker in Lao capital Vientiane, shared how her daily life had been affected by economic challenges, particularly the rising cost of food and basic living expenses.
"In recent years, life has been challenging for many of us. The rapid rise in food prices and everyday costs made it hard to manage monthly budgets. I believe many families have felt the pressure deeply," Minny told Xinhua.
She sees the recent decline in inflation as a hopeful sign that the government's efforts to stabilize the economy are taking effect. Minny believes that steady growth will not only ease daily financial burdens but also create more job opportunities and attract investors, ultimately supporting broader business development across the country.
While she acknowledges that challenges remain, she's still optimistic that the improving economic trends will bring lasting benefits to Lao citizens.
The Lao government has stepped up efforts to curb inflation by implementing tighter monetary policies. Authorities are also pushing to build an independent and self-reliant economy, placing strong emphasis on increasing revenue, controlling public expenditure, and enhancing financial management.
Sengdao, a vendor at a night market in Vientiane, expressed hope that the government's ongoing efforts to boost economic growth and reduce inflation will help improve consumer spending.
"High prices in recent years have made customers more cautious, leading to lower income for small vendors. I believe steady economic progress will benefit both vendors and citizens across the country," she said.
With signs of improvement in the economy, Sengdao is hopeful that growing public confidence will lead to increased spending, allowing small businesses like hers to expand.
Laos' GDP is estimated to grow by 4.5 percent in the first six months of 2025. In addition, the country's economic outlook in the third quarter of 2025 remains positive, with strong potential in the tourism sector and growing investment.
"The revival of the tourism sector is crucial to the country's recovery, especially for vendors and local businesses that rely on tourist spending," said Khim, a street vendor in Vientiane.
"I hope the government will continue investing in tourism promotion and infrastructure to attract more visitors. When more tourists come, it brings life back to the market. For me, a strong tourism recovery isn't just about business, it's about restoring livelihoods and helping communities move forward," he added. ■
