A recent survey shows that households in Laos are slashing expenses on education, health, and food due to skyrocketing inflation.
Economists have raised concerns about the human capital in Laos, saying that reduced spending on education and health will have long-term effects on the population, says the Macroeconomics Research Institute.
Another report, from the World Bank from late last year, showed that two-thirds of households cut spending on education and health. It also pointed out that the domestic purchasing power of the richest in Laos has decreased by 20% due to inflation.
Most households in Laos are now looking towards savings and investments of funds, rather than spending their money on education. In the first quarter of 2023, households spent 57.8 percent of earnings on basic consumer goods, 26.2 percent on investments, and 16 percent on savings, based on the Consumer Sentiment and Business Tendency Survey.
A continuous rise in inflation means that households, especially low-income ones, are unable to keep up their earnings with the ever-increasing prices of essential goods. The knock-on effect of this is that more and more young people are unable to obtain higher education and have to start earning a living to help their families out, thereby continuing to be stuck in a poverty cycle, according to Vientiane Times.
According to the latest report from the Lao Statistics Bureau (LSB), inflation rates rose to 41.3 percent in February, up from a rate of 40.3 percent in January.
The LSB has said that they expect the prices of goods and commodities to increase in March, while the inflation rate for March will hover around the same percentage as that of February.
