Laos Has Second Highest Inflation Rate in ASEAN

Inflation and cost of living in Laos

Laos is suffering from one of the highest inflation rates in the region, raising concerns as the population suffers from financial hardship.

Year-on-year inflation in Laos rose from 5.04 percent in November to 5.27 percent in December last year, the highest figure recorded since August 2020, according to Vientiane Times.

Laos also saw the highest inflation rate among ASEAN countries except for Myanmar, which recorded inflation at 6.51 percent.

Indonesia saw inflation at 1.87 percent, Cambodia saw 3.8 percent, Malaysia saw 3.2 percent, Singapore 4 percent, Vietnam 1.81 percent, Thailand 2.18 percent, and Brunei 1.80 percent.

Many countries around the world have been affected by inflation since the Covid-19 pandemic began, with the US seeing 7 percent inflation, Russia seeing inflation at 8.4 percent, and many European countries seeing inflation rates above 5 percent.

The International Monetary Fund has said that rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, particularly in the US and many emerging markets and developing economies.

At the same time, according to Fitch Ratings, smaller frontier markets will be vulnerable to the US Federal Reserve’s interest rate hikes, citing Sri Lanka, Pakistan, and Laos as particular examples.

Meanwhile, fuel prices have continually risen in Laos, along with a rapidly rising cost of living.

According to the Lao Statistics Bureau, transportation costs have increased 12.7 percent, while hotel and restaurant rates increased by 8.3 percent, with healthcare and drug costs up 8.2 percent, and other goods and services increasing by 7.9 percent.

Alcohol and tobacco went up by 6.8 percent, while utilities such as water supply, electricity, and cooking gas all jumped by 5.8 percent. Clothing and footwear went up by 5.4 percent, and furniture prices increased by 4.9 percent.

Lawmakers in Laos began discussions last week surrounding a raise of the national minimum wage amid inflation and an increasing cost of living.