Laos has reduced poverty over the past decade, even through the shocks of COVID-19, high inflation, and a depreciating currency. But the latest poverty profile shows that progress is becoming harder to sustain: too many people still depend on low-skilled unproductive work, the labor force is poorly equipped for the skilled jobs of the future, and disparities across regions and ethnic groups persist.
Anorath Douangphachanh / World Bank
Lao PDR Poverty Profile for 2026
Based on the Lao Expenditure and Consumption Surveys from 2012/13, 2018/19, and 2024/25, the report points to three headline messages:
• Poverty has decreased considerably, but the pace of reduction has slowed in recent years.
• Rural households, supported by rising income from crop farming, have driven recent progress, but poverty and vulnerability are rising in urban areas.
• The next challenge is jobs: most workers remain in agriculture or informal work, with few paths to better employment.
Poverty is down, and living conditions have improved
- The national poverty rate fell from 24.6% in 2012 to 15% in 2024. About 500,000 fewer people live in poverty than a decade ago, despite population growth.
- More households now have better housing, improved sanitation, access to grid electricity, and durable assets.
- Inequality has also fallen, reversing a two-decade upward trend, thanks to stronger welfare gains among rural and less well-off households.
Poverty rate and distribution of poor across urban–rural, 2012/13–2024/25
But better jobs are not keeping pace with GDP growth
- Poverty reduction has slowed since 2018 as growth weakened and costs of living rose—household purchasing power has been eroded by high inflation, and good jobs remain limited.
- Most workers are still in informal or low-productivity work. In 2024, 82% of poor workers and 64% of non-poor workers were in agriculture.
- Youths (aged 15-24) are significantly more likely to be economically inactive or unpaid family workers than more mature workers.
This raises a critical question for future development: Laos has a young workforce, but many people lack the skills and opportunities needed to move into better and more productive jobs. GDP growth has relied heavily on capital-intensive investment in hydropower and mining sectors, which have created fewer jobs than other sectors could. Commercial farming is becoming one route out of poverty, but the shift toward commercial agriculture has been driven by non-poor people.
The map of poverty is changing
While poverty remains concentrated in rural areas, urban areas now need closer attention. Between 2018 and 2024, most urban households saw their wellbeing decline. The urban poverty rate rose from 7% to 8.9%, and the share of poor people living in urban areas increased from 12.4% to 19.3%.
As the gap between rural and urban areas narrows, inequality is increasingly shaped by differences within cities and villages. Some regions and provinces have continued to improve, while in others poverty has stalled or risen.
Poverty rate by region, 2012/13–2024/25
More people are moving to find work
With few good opportunities at home, more Lao workers are migrating within the country and overseas. The share of households receiving remittances more than doubled from 9.2 percent in 2018 to 21.6 percent in 2024.
Not everyone has the same chance to move, however, with opportunities often reliant on access to information and personal connections. Poorer households are less likely to migrate, while rural households and Lao-Taï workers are more likely to go overseas. If young people leave school early to work abroad, emigration could become a long-term challenge for skills and human development.
Some groups are lagging
Poverty has fallen across the country, but progress has not reached everyone equally.
- Hmong-Iumien and Mon-Khmer communities remain significantly poorer than Lao-Taï and Sino-Tibetan groups. They account for a disproportionate share of the poor population.
- Children under ten have the highest poverty rate of any age group, while teenagers and youths are emerging as new vulnerable groups.
- Despite improvement, poor and rural households still have lower access to good housing, basic utilities, and health services.
What comes next: skills, jobs, and stability
Sustaining progress will require a stronger focus on people and jobs. Better education, skills training, and health services can help young Lao move into more productive work.
At the same time, Laos needs more ways for farms and businesses to grow. In agriculture, this means higher productivity, better market links, more processing, and easier access to credit, inputs, irrigation, and business services. Outside agriculture, it means removing barriers that make it hard for firms to start, expand, and hire.
Future growth will reduce poverty only if it reaches the people and places still being left behind.