May inflation sees 3.377 percent increase in Laos
May inflation sees 3.377 percent increase in Laos
Laos' Consumer Price Index (CPI) saw a minor increase last month, with the price of most goods and services remaining stable.
According to a report from the National Statistics Bureau, the CPI reached 110.54 points in May, only 0.38 percent change compared to the previous month.
Only the CPI of water, electricity and cooking gas saw a 1.48 percent increase after the government increased electricity rates in March, resulting in higher bills for energy consumers.
The CPI of the remaining 11 goods and services categories saw a minor change within a 0 to 0.75 percent range. The CPI figures for alcoholic drinks and cigarettes, household goods and transport services decreased by 0.34 percent, 0.01 percent and 0.17 percent respectively.
The smaller month-on-month increase in the CPI has helped to rein in inflation. The inflation rate rose by only 3.77 percent, down from 4.4 percent in April, 5.33 percent in March, 6.11 percent in February and 6.69 percent in January.
The high base effect of last year's inflation rate has also contributed to lower inflation this year. At the end of last year, the inflation rate rose above 6 percent.
The National Statistics Bureau says in a statement posted on its website that low inflation in the goods and service categories, including food and non-alcoholic drinks, and transport, is one of the core reasons for the drop in inflation in May.
The lower rate of inflation in these categories was the result of the government restricting the export of rice due to fears that a shortage of the staple would lead to higher food prices in general.
Tropical storms last year flooded large areas of farmland and affected infrastructure. The bureau also said this year's earlier harvest of irrigated rice was large, meaning that market supply was stable.
The decrease in the year-on-year CPI of the transport service category has also helped to keep inflation low. The decrease was due to the falling price of fuel in the domestic and world markets.
The bureau drew attention to the fact that higher electricity prices will pose a threat for the government in managing inflation. Its statement noted that higher energy costs will have a knock-on effect on manufacturers, who will likely raise the cost of their products and services accordingly.
The bureau also warns the sectors concerned to keep a close eye on the price of rice and other food items in the next few months, as farmers will not sell more rice until they harvest the wet season crop.
Difficult transport condit-ions will also make the shipment of rice and food from production bases to markets more complex, which is also likely to boost inflation.
vientiane times
