The Lao Statistics Bureau reported in January the inflation rose to 6.25%, in February rose to 7.3%, and in March high up to 8.5%. From the latest information, inflation has already increased to 9.9% in April, with no signal to decrease.
Laos is the country in Southeast Asia that has the highest rate of inflation, which have the primary cause of inflation as the fuels in Laos have faced a shortage of fuel due to a shortage of foreign currency to import fuel, including the war between Russia and Ukraine which increases in global oil prices, it is leading to increases fuel rates rose to 86% in Laos. From the latest news reports, some oil stations are unavailable due to a shortage of fuel from 4 May 2022 to 10 May 2022.
The Government of Laos has had consultative meetings in recent weeks as well as invited representatives from the private sector to find solutions for the economy of Laos. From the consultative meetings, the government will support fuel retailers by not relying on the price of fuel at market rates, another proposal from the government will be to reduce excise tax by 50% if necessary, other than if global oil prices keep rising the government may cancel collect excise duty on fuel altogether. The result of the consultation will submit to the Prime Minister and solutions may be activated under a 3 months trial.
Regarding the rising inflation and Lao Kip currency has depreciation which makes people living in Laos go through heavy obstacles with a rising cost of living. For this reason, the government has agreed to increase the minimum wage from 1,100,000 LAK per month to 1,500,000 LAK per month, but this agreement still has yet made the decision exact amount to increase the minimum wage.
Published 16/05/2022
By Windy K.
