VIENTIANE, Jun 10 (NNN-KPL) – The year-on-year inflation rate in Laos dropped to 38.86 percent in May, down from 39.89 percent in Apr, according to the Lao Statistics Bureau.
Laos’ inflation rate dipped slightly to 40.97 percent in Mar, and 39.89 percent in Apr, after Laos passed the peak of headline inflation recorded at 41.26 percent in Feb this year, according to a report released by the Lao Statistics Bureau website, yesterday.
However, the figure remains sky-high, causing real household incomes to fall for many people, weakening consumption and investment.
Depreciation of the kip (Lao currency) is one of the main factors driving inflation, as one-third of the goods used to calculate price rises are imported.
In May, the hike in consumer prices was mainly driven by the food and non-alcoholic beverage category, which surged by 52.69 percent year-on-year.
This was followed by the medical care and medicines category at 40.78 percent, hotel and restaurant category at 38.73 percent, household goods at 35.65 percent, and clothing and footwear category at 28.34 percent.
The Lao government has pledged to tighten currency exchange rates and expenditure, and boost domestic revenue.
Laos’ central bank, the Bank of the Lao PDR (BOL), announced the establishment of a new department to regulate foreign currencies on Jun 1, aiming to monitor the inflow and outflow of foreign currencies and stimulate wider use of the kip.
Meanwhile, economists say, it is critical for Laos to boost production levels, in order to reduce the volume of imported goods, as a means to revitalise the economy in the long run, according to the report.– NNN-KPL
