The price of rice surged by 48.1 per cent year-on-year. - VT
VIENTIANE (Vientiane Times/Asia News Network): The cost of just about everything from food to energy to transport is rising significantly, with the average inflation rate recorded at 19.69 per cent over the past 10 months of this year.
In October alone, prices rose by 36.75 per cent, up from 34.05 per cent recorded in September and 30.01 per cent in August, according to the latest report from the Lao Statistics Bureau.
The global economic downturn, conflict between major powers and the depreciation of the kip are among the main factors driving inflation in Laos.
The price of rice surged by 48.1 per cent year-on-year.
The spiralling cost of goods and services is one of the greatest concerns of Lao people, with months of constantly rising prices adding to people’s stress about what lies ahead in the future.
The inflation forecast has been sharply revised up to 17 per cent for 2022 on higher-than-expected oil prices and the weaker kip, according to a recent report by the Asian Development Bank.
The ADB stated that the kip fell in value by 37.4 per cent against the US dollar and by 32.9 per cent against the Thai baht in the official currency market from January to August.
The gap between the official and parallel foreign exchange markets was 38.6 per cent by mid-June, but narrowed to an average of 15.9 per cent in August.
“Rising inflation and Laos’ high public debt reinforced off-risk sentiment among analysts and market investors,” the ADB stated.
“Public and publicly guaranteed debt - a large portion of which is external - climbed to 88 per cent of GDP in 2021, up from 72 per cent in 2020, as the government raised domestic borrowing. The US dollar value of this debt increased because of the weaker kip.”
According to the Lao Statistics Bureau, the price of fuel in Laos is also trending upwards, which will further impact on agricultural production.
Farmers are not only suffering as a result of rising production costs, due to the high price of fertiliser, animal feed and crop seeds, but are also feeling the effects of weather extremes.
In October, the cost of food and non-alcoholic beverages increased by 1.8 per cent month-on-month and 38.8 per cent year-on-year.
The price rise in this category was driven by the higher price of rice, which surged by 48.1 per cent year-on-year.
In addition, the cost of pork rose by 44.7 per cent year-on-year, the price of beef rose by 21.3 per cent, poultry by 28.8 per cent, fish and seafood by 1.3 per cent, eggs, cheese and milk by 43.5 per cent, cooking oil by 95 per cent, and vegetables by 43 per cent.
Meanwhile, costs in the communications and transport category rose by 58.1 per cent year-on-year. Specifically, the price of vehicles, fuel and transport equipment went up by 61.6 per cent, 95 per cent and 62.4 per cent year-on-year respectively.
