Laos is a lower-middle income economy according to the World Bank, and a UN-designated Least Developed Country. Its 2024 GDP of $16.5 billion accounts for 0.4% of the regional GDP of Southeast Asia. With a population of 7.77 million, Laos’ GDP per capita is $2,124, the third-lowest in the region.
From 2015 to 2024, 13,112 aid and development projects were implemented in Laos by 79 development partners, totalling $18 billion in official development finance (ODF).
Key trends
ODF disbursements including grants, loans, and other forms of assistance to Laos have decreased over time, though spending rebounded with a 35% increase from 2023 to 2024. However, at $1.2 billion, 2024 spending remains much lower than Laos’ pre-pandemic ODF average of $2.2 billion.
ODF still accounts for a high proportion of GDP in Laos, at 7% in 2024, though this is much less than its pre-pandemic average of 13%. Of total ODF to Laos from 2015 to 2024, 49% is disbursed as non-concessional loans, 31% as grants, and 20% as concessional loans.
New commitments to Laos decreased by 49% from 2023 to 2024.
- Spent
- Committed
Development partners
China is Laos’ primary development partner, accounting for 54.8% of its total ODF received since 2015, though its contribution has waned. The Asian Development Bank (ADB) has provided 6%, while Japan and the World Bank have each provided just under 5%. The United States has provided 4.3%.
While still Laos’ largest development partner over the reporting period, China’s support to the country has decreased since 2018. In 2024, for the first time since 2015, it was not Laos’ primary development partner, disbursing a record low of $119.4 million against a pre-pandemic average of $1.4 billion. China’s ODF to Laos is disbursed primarily through non-concessional loans (83%) and has concentrated overwhelmingly on the energy sector (84%), particularly hydropower dams.
Laos’ largest development partner in 2024 was the Asian Infrastructure Investment Bank (AIIB), which disbursed a $250 million non-concessional loan for the National Road 13 South Extension Improvement and Maintenance Project. The AIIB has been a small partner for Laos from 2015 to 2024, but may continue to increase its support moving forward.
The ADB’s support targets the energy, agriculture, forestry, fishing, and education sectors. Concessional loans make up 47% of the ADB’s ODF to Laos, grants 36%, and non-concessional loans 17%.
Japan’s support to Laos is highly concessional, with 76% of its ODF disbursed as grants and the remainder as concessional loans. Japan targets the transport and storage sector, with secondary-level support going to education, energy, water and sanitation, and health.
The World Bank’s support for Laos has increased since 2015, with a focus on government and civil society, health, and education. Its ODF is disbursed primarily as concessional loans (86%), with the remainder as grants.
The United States has steadily increased its support to Laos, from $32.6 million in 2015 to a record high of $143 million in 2024. The United States focuses on the government and civil society sector and disburses the entirety of its ODF to Laos through grants.
Sectors
With the exception of the energy and education sectors, Laos receives less than the regional average for every sector. Laos’ energy sector receives almost triple the regional average as a proportion of ODF due to several multi-billion-dollar energy generation projects, particularly hydropower dams along the Mekong. However, that overwhelming focus is receding: the energy sector absorbed up to 62% of total ODF to Laos in some years between 2016 and 2018, but only 16% in 2024.
- Laos
- Regional average
Policy goals
The Southeast Asia Aid Map tracks ODF with integrated policy goals across three policy domains or cross-cutting themes (as distinct from sectors): climate action, gender equality, and disability inclusion.
Over 2015–24, 15% of Laos’ ODF was directed to gender equality and 2% to disability inclusion, both below the regional average. Its share incorporating climate action was above the regional average, at 53% — due in part to the inclusion of hydropower dams as climate-related projects.
Provision of intra-regional ODF
Laos is the second-smallest provider of intra-regional ODF, providing an annual average of $94,699 since 2015. Laos has primarily supported regional initiatives, alongside bilateral support to Indonesia in 2021, and focuses on the humanitarian aid and government and civil society sectors. Laos is the largest recipient of intra-regional ODF, having received more than two-thirds of all intra-regional ODF since 2015. Most of this came from Thailand in the form of concessional loans and grants to support bridge and road construction projects.