Inflation Rate Sees Slight Drop in September, Government Takes Aim at Rising Cost of Living

Inflation Rate Sees Slight Drop in September, Government Takes Aim at Rising Cost of Living
FILE: a local market in Laos (photo: hotels)

Laos recorded an inflation rate of 25.69 percent in September, a slight decrease from August which was capped at 25.88 percent, according to the official Bank of Lao PDR website

In the government’s monthly meeting on 28-29 September, Prime Minister Sonexay Siphandone, reiterated the the essential role business sectors have in managing exchange rates and stabilizing commodity prices, especially for items such as rice, meat, fish, and eggs.

To attract more foreign currency, PM Sonexay also proposed encouraging and closely monitoring the progress of approved foreign investment projects. This strategy aims to attract additional foreign currency. It includes expediting the settlement of project accounts through the banking system.

The persistent issue of inflation in Laos stems from various factors, one of which is the depreciation of the Lao kip currency. This devaluation can be attributed to a labor shortage as workers seek higher-paying employment opportunities abroad due to low salaries in Laos. While the government has recently announced an increase in the minimum wage, some community members argue it fails to match the ongoing depreciation of the Lao Kip.

Another significant contributing factor is the inability of household incomes to keep pace with inflation, according to a recent survey by the World Bank. The findings revealed that families in Laos are struggling to meet rising living costs. As a result, they are forced to cut their spending on essential areas such as food, healthcare, and education.

The latest inflation rate revealed in September has sparked further criticism among Lao social media users. Many have pointed out the discrepancy between the decreased inflation rate and the rising prices of food and beverages, as well as the current exchange rates.

“I’d rather have a high inflation rate that keeps goods affordable than a low inflation rate that still leaves people struggling,” commented a Facebook user.

“Is this for real? Are you trying to tell me the inflation rate is decreasing while the price of everything is like 50-60 percent higher?!”, said another social media user.