The year-on-year inflation rate in Laos surged to 9.9 per cent in April, the highest figure recorded since January 2016, according to the latest report from the Lao Statistics Bureau.
The consumer price index jumped at its fastest pace in recent months, further putting the squeeze on consumers with more to be paid for food, fuel and other essentials.
Laos has one of the highest rates of inflation in Southeast Asia, mainly driven by rising oil prices and the continuing depreciation of the kip.
The Russia-Ukraine conflict has resulted in a volatile global fuel market, heightening geopolitical uncertainty and impacting on prices of consumer goods in Laos, exacerbated by the continuing Covid pandemic.
The price of fuel surged by 11.4 per cent month-on-month (with regular grade rising by 5.1 per cent and diesel by 15.7 per cent) and 86.3 per cent year-on-year (regular grade petrol rising 72 per cent and diesel 96.6 per cent).
In addition, the price of engine oil, along with gold, went up by 2.9 per cent and 8.9 per cent month-on-month and 14.5 per cent and 36.8 per cent year-on-year respectively, according to the Lao Statistics Bureau.
Since the start of this year, authorities have hiked fuel prices numerous times, forcing transport operators to bump up their prices.
The continuing depreciation of the kip against the Thai baht and US dollar means businesses have to spend more to buy the foreign currencies needed to import goods.
The kip has suffered the biggest loss in value against the baht and dollar since the Asian financial crisis in 1997-1998. The kip has plunged to its lowest value in decades due to a supply-demand mismatch.
BCEL exchange rates on June 14, 2017, saw $1 buy 8,216 kip and sell for 8,256 kip, one baht buy 242.93 kip and sell for 244.74 kip, whereas on Friday, May 6, $1 bought 12,665 kip and sold for 12,693 kip, with one baht buying 404.03 kip and selling for 404.07 kip.
The government’s attempt to tackle the rising price of fuel and inflation has been hampered by the continuing depreciation of the kip.
In April, costs in the communications and transport category rose by 6.7 per cent month-on-month, and 26.9 per cent year-on-year.
In the meantime, prices in the goods and service category surged by 3.4 per cent month-on-month and 16.3 per cent year-on-year.
The cost of medical care and medicines increased by 0.7 per cent month-on-month and 11 per cent year-on-year. The surge in this category was driven by the price of medicine and hospital fees. Meanwhile the cost of clothing and footwear rose by one per cent month-on-month and 9.4 per cent year-on-year.
In addition, prices in the housing, water, electricity and gas category rose by 1.7 per cent month-on-month and nine per cent year-on-year.
The cost of food and non-alcoholic beverages increased by 1.8 per cent month-on-month and 5.7 per cent year-on-year.
VIENTIANE TIMES/ASIA NEWS NETWORK