This study investigates the impact of stagflation on SME performance in Champasack Province, Lao PDR. Utilizing data from 450 SME’s owners, acquired via structured questionnaires, the research employed the structural equation modeling technique for data analysis. The result showed that stagflation have positive impact and significant on marketing management capability, Consumers, and SME performance. According to Marketig management capability has a positive impact and significant on Consumers, but its negative impact and significant on SME performances, and Consumers has a positive impact and significant on SME performances. The insights derived from this research provide essential directives for SME managers striving to business survival in economic uncertenty. Therefore, Medium-sized and small-sized enterprises in ten districts of Champasack Province, Lao PDR, need to effectively develop their marketing management capability to stimulate consumer spending during periods of stagflation. This will lead to a continuous improvement in SME performance and high business survival during the period of stagflation.