Vientiane, July 23 -- The Lao Government's decision to raise salaries for civil servants in 2026 to help restore purchasing power amid rising living costs is facing significant challenges, including limited fiscal space, a heavy public debt burden and the economy's continued exposure to external shocks, according to the World Bank (WB)'s Lao Economic Monitor June 2026.

According to the WB report, amid a fragile economic recovery, the salary increase is considered an important step to retain qualified civil servants while helping workers cope with rising living costs. Inflation in Laos remains high, reaching 10.2% in April due to the impact of the global fuel price crisis, directly affecting people's livelihoods and real incomes.

The WB ...