## Structural Reforms to Lift Growth: Lao People's Democratic Republic

_Selected Issues Papers, March 18, 2026_

## Source details

**Canonical URL:** [Structural Reforms to Lift Growth: Lao People's Democratic Republic](https://www.imf.org/en/publications/selected-issues-papers/issues/2026/03/18/structural-reforms-to-lift-growth-lao-people-s-democratic-republic-574762)

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## Bibliographic details
- Authors: Weining Xin, Liangliang Zhu
- Published: March 18, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9781513569482.018

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### Context and objective
- Background: Improved macroeconomic stability in Lao People’s Democratic Republic (Lao PDR) and the ambition to achieve upper-middle-income (UMI) status by 2035.
- Objective: Examine the impact of structural reforms on Lao PDR’s growth outcomes and quantify potential growth gains from closing structural gaps with upper middle-income countries (UMICs).

### Key findings on structural gaps
- Major gaps relative to UMICs are concentrated in:
  - Governance
  - Business regulations
  - Labor market
  - Human development
- Interpretation: These gaps imply substantial scope for structural reforms to raise potential growth by catching up with aspirational peers.

### Cross-country evidence on reform impacts
- Structural reforms produce significant output boosts over time.
- Impact characteristics:
  - Persistent positive impact
  - Cumulation over time, delivering larger gains in the medium term

### Policy implications and recommended reform areas
- Priority reform directions to close gaps with UMICs:
  - Strengthen governance
  - Improve the business environment
  - Promote human development
- Expected outcome: Implementing ambitious reforms in these areas would deliver large growth gains, especially over the medium term, and support attainment of Lao PDR’s development goal in a sustainable manner.

*Structural Reforms to Lift Growth: Lao People's Democratic Republic, Selected Issues Paper No. 2026/023 (March 18, 2026).*

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/03/18/structural-reforms-to-lift-growth-lao-people-s-democratic-republic-574762_