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Laos plans to raise minimum government salary by 2025

ANN/LAOTIAN TIMES – The Lao government has unveiled plans to raise the minimum salary for civil servants to between LAK2 million and LAK2.2 million (USD91.45-100.60) by 2025 in response to the escalating cost of living and economic challenges.

Minister of Finance Santiphap Phomvihane addressed the National Assembly on June 13, outlining the government’s policy on salary and allowance increases for civil servants and police.

Despite recent hikes, the minister admitted that current salaries and allowances are inadequate to counteract the effects of inflation and currency depreciation on the cost of living.

In 2023, the government raised the minimum salary to LAK1.7 million (USD77.74) and provided an additional LAK150,000 (USD6.86) to cover the higher cost of living. This year, another increase took place, bringing the minimum salary to LAK1.85 million (USD84.59).

Santiphap emphasised the government considers the timely payment of salaries and allowances for civil servants, military, police and retired employees a priority. However, he noted the challenging economic situation, marked by inflation and exchange rate fluctuations, continues to affect the living standards of government employees.

To address these issues, the Ministry of Finance is exploring the possibility of further increasing salaries. Preliminary research suggests that the minimum salary could be raised to LAK2 million to LAK2.2 million (USD91.45 -100.60), representing an eight-18 per cent increase from the current minimum. This raise is expected to be implemented in stages starting in 2025.

The proposed salary increase is part of a broader effort by the Lao government to mitigate the impact of inflation and currency depreciation on its workforce.

As of June 13, BCEL Bank and Phongsavanh Bank are selling US dollars at LAK21,825 and Thai baht at LAK694.45. Unofficial rates are much higher, with the US dollar exceeding LAK25,000 and the Thai baht over LAK710 at local money exchange shops.