The World Bank has urged Laos to raise its value-added tax rate and increase taxes on cigarettes and alcohol to help address high inflation and currency depreciation, according to Radio Free Asia.
Alex Kremer, the World Bank’s representative in Laos, said in a report last month that the government should spend more money on healthcare and education to set a foundation for future development.
Laos’ economy has struggled with rapidly rising prices, low foreign investment and public debt that could increase to 125 percent of GDP in 2024. The country’s debt reached $18.7 billion by the end of 2022. Over half the debt is owed to China.
Kremer said the debt has destabilized the country’s macroeconomy and slowed economic growth.