- Business

Laos’s inflation continues to rise in January, hits 23-year record

The inflation rate in Laos surged to 40.3% in January, a record high in the last 23 years, according to the Statistics Bureau under the Lao Ministry of Planning and Investment.

According to the agency, the depreciation of the Lao currency kip against USD and Thai baht and the soaring prices of fuel, gas, and other imported goods are among the main factors driving inflation.

High fuel prices have pushed up production costs in the country because it has to import machinery, animal feed, and fertilisers at increasingly high prices.

Laos’s consumer price index has spiked unexpectedly since the beginning of last year. Inflation in May 2022 was recorded at 12.81% before rising to 23.61% in June, 25.62% in July, 30.01% in August, 34.05% in September, 36.75% in October, 38.46% in November and 39.27% in December.

Overall, Laos’s average inflation in 2022 is up to 23%, up sharply from 3.8% in 2021.

In response to the hiked inflation, the Lao government has issued many policies to control the devaluation of its currency, including raising interest rates and using foreign exchange reserves to import essential commodities, and strict control of the exchange rate.

The Lao Statistics Bureau forecasts that the country’s inflation rate will remain at double-digit levels in the first and second quarters of 2023. However, the Government’s measures to control the prices of products and services may soon generate positive results, curbing the inflation rate at the end of the year.

Previously, the Lao government pledged to ensure the country’s economic growth rate at least of 4.5% and reduce the inflation rate to 9% in 2023.

Source: Lao News Agency