Laos Inflation Rate Sees Modest Decline in May
The country recorded a year-on-year inflation rate of 38.86% in May, according to information from the Lao Statistics Bureau (LSB).
The year-on-year inflation rate in Laos declined to 38.86 percent in May, down from 39.89 percent in April and 40.97 in March this year.
In the same period in May 2022, the country recorded a 12.8% inflation rate, the highest point in 15 years as the country began suffering chronic fuel shortages.
Meanwhile, the continued devaluation of the Lao kip (LAK) contributes significantly to inflation, as around one-third of the goods included in price calculations are imported.
Vientiane Times reports that the price of food and non-alcoholic beverages rose by 52.69% in May, while medicines and medical care costs jumped by 40.78%.
Hotel and restaurant services increased by 37.4% with the cost of housing, water, electricity, and cooking gas also going up.
Transportation costs rose only slightly, however, by just 24.72%.
The continued depreciation of the local currency has seen the Bank of Laos reinstate its Foreign Currency Control Department in attempts to get the situation under control.
Meanwhile, despite runaway inflation, the country’s economists remain optimistic, forecasting 4.5% economic growth this year.
Although international observers agree that Laos could return to a period of growth, the IMF and World Bank have both warned that the scale of Laos’ public and external debt poses substantial risks to this outlook.