Government Targets Lower Inflation Rates in 2024

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Laos Inflation Rate Hit 40.30 Percent in January
Woman holding a pile of LAK banknotes (photo: www.laostravel.indochinacharm.com/)

Despite the country’s persistent efforts to curb inflation, Laos experienced an average inflation rate of 31.2 percent throughout 2023. But the central bank and the Lao government are committed to taking action and reducing the rating by 9 percent in 2024.

The latest report from the Lao Statistics Bureau reveals that inflation stood at 24.4 percent in December, although it showed a slight decrease from 25.24 percent in November.

The weakening kip has been identified as a primary contributor to the issue, in addition to weak domestic productivity, high import values, and difficulties in regulating local market prices. The government’s attempt to control product prices also faced challenges, resulting in continuous increases in the prices of goods and services.

In December, the hotel and restaurant category witnessed the highest year-on-year price rise at 35.9 percent, followed by clothing and footwear, medical care, and household goods. 

To address the ongoing economic challenges, the Bank of Laos (BOL) pledged to tighten monetary policy, focusing on stabilizing the kip’s value as a key measure to regulate the cost of goods and services. This is in line with the government’s plan to reduce inflation by 9 percent in 2024.

On 26-27 December, Prime Minister Sonexay Siphandone directed relevant sectors to modernize revenue collection systems, identify new revenue streams, and minimize financial leaks. The BOL is also committed to enhancing foreign currency regulations, increasing export revenue, and attracting investments to stabilize the kip’s value and decrease inflation.