Laos Records 40.8 Percent Inflation Rate in First Quarter of 2023

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Laos Records 40.8 Percent Inflation Rate in First Quarter of 2023
Dao Heuang Market Pakse (photo: southern-laos.com)
Inflation in Laos has been rising steadily, with an average rate of 40.8 percent reported in the first quarter of 2023.

According to Lao Youth Radio, the inflation rate increase can be attributed to the strengthening of the dollar due to the rise in policy interest rates in major economies, in addition to the restrictions on the production and transportation of energy, fuel, and agricultural products globally due to the Russia-Ukraine crisis.

Moreover, Laos has yet to establish a strong domestic production base, with most consumer and production-related items still being imported which depletes a lot of its foreign currency reserve. Machinery, animal feed, fertilizers, fish fingerlings, and numerous agricultural products in Laos are mostly imported, contributing to the inflation rate.

To combat the surging inflation rate, the Bank of Laos will continue tightening monetary policy and regulating the exchange rate, according to Mr. Soulisack Thammavong, head of the monetary policy department.

Additionally, the government has pledged to manage the prices of products in local markets to minimize the impact on the poor.

Having said that, Laos was able to observe a slight decrease in the inflation rate in March at 40.97 percent compared to February’s figures of 41.3 percent. The country is expected to see an average inflation rate of around 40.8 percent for the year, with food and non-alcoholic beverages seeing the most increase in prices.