The Governor of the Bank of Lao PDR, Mr. Bounleua Sinxayvoravong, presented a bold proposal to the National Assembly, calling for stringent limitations on luxury imports as a key strategy to combat inflation in Laos.
During a recent session at the National Assembly, Mr. Bounleua Sinxayvoravong discussed the rampant inflation in Laos and the unique challenges it poses due to the country’s heavy dependence on imports, which account for 70-80 percent of the country’s goods.
He went on to stress that traditional methods of addressing overall inflation may not be completely effective in Laos, due to the ever-widening trade deficit in the country.
In his presentation, the governor proposed aggressive measures to curtail the importation of luxury goods. Quotas would be implemented on luxury imports, effectively reducing the volume of these goods entering the country.
Moreover, he suggested imposing higher taxes on luxury items to discourage their consumption and alleviate the pressure on foreign currency reserves.
Mr. Bounleua also added that the direct link between luxury imports, exchange rates, and inflation necessitated targeted and specific actions. By restricting luxury imports, Laos would reduce its reliance on foreign currency and subsequently mitigate inflationary pressures.
In his concluding remarks, the governor underscored the importance of this proposal, stating that addressing inflation requires a comprehensive approach that tackles the root causes and promotes economic stability. By curbing luxury imports, Laos aims to safeguard its economy, stabilize exchange rates, and mitigate the impact of inflation on the daily lives of its citizens.