ADB holds Laos growth forecast and lowers its 2026 inflation forecast to 8%

Facts

Growth: in its Asian Development Outlook September 2026 (23 September 2026), the Asian Development Bank (ADB) kept its forecast for Lao PDR real GDP growth at 4.0% ¹ for 2026 and 4.5% for 2027, both unchanged from July 2026. Growth was 4.4% ² in 2025. Sources: ADB ADO September 2026, Southeast Asia chapter; Xinhua (2026-09-23); Laotian Times (2026-07-10).

Prices: ADB forecasts average inflation of 8% ³ in 2026 (revised down from 9.8% (July 2026)) and 6.5% in 2027 (revised down from 6.7% (July 2026)). ADB attributes the lower projection to policy support. Sources: as above.

Tourism: international tourist arrivals were 2.6 million ⁴ in January–June 2026 (up 9.9% from H1 2025). ADB lists higher fuel costs, weaker external demand, limited policy space and debt repayment pressure as risks. Source: Xinhua (2026-09-23).

Analysis

Over time, the revised forecast lines up with observed prices: year-on-year inflation fell from 10.2% in April to 7.4% in June, then edged up to 7.7% in August, and the January–August average was 7.9% ⁵. A full-year average of 8% therefore implies no further easing this year, and remains above the Bank of the Lao PDR's 2026 target (below 7%).

Across the region, Laos's inflation forecast is well below Myanmar's (24.0%) but above Cambodia's (4.7%) and Vietnam's (4.3%). Unlike Cambodia, where visitor arrivals fell (down 47.9% from H1 2025), Lao tourism is growing, which supports service-sector incomes for borrowers outside agriculture.

Implications

Counterpoints and uncertainties

The inflation forecast depends on a stable kip and fuel prices; ADB flags higher fuel costs and debt repayment pressure as risks. The forecast values come from Xinhua's report of the ADB release, and the July comparison values from the Laotian Times; the ADB chapter itself confirms only that the growth outlook is unchanged and that projected inflation was lowered.