Lao Inflation rate drops to 2.9 percent in July
Lao Inflation rate drops to 2.9 percent in July
The Lao inflation rate continued to decline in July thanks to low food prices, especially rice.
According to a report from the Ministry of Planning and Investment's Lao National Statistics Bureau, the inflation rate in July was 2.9 percent, dropping from 3.56 percent in June thanks to falling prices of food compared to the previous year.
The Lao inflation rate has continued to drop since the beginning of the year. The inflation rate was 6.69 percent in January, 6.11 in February, 5.33 in March, 4.37 in April and 3.77 in May, thanks to a high base level last year.
The National Statistics Bureau says that one of the main causes which made the inflation rate in July lower than June, was the falling price of rice, one of the main inflation indexes in the 12 Lao goods and services categories, and fuel prices.
In the food category the price of rice remains low at 3.6 percent as the government has restricted the export of rice to foreign countries fearing that a shortage of supply in the commodity could cause higher inflation. An increasing input of irrigated rice also helps to secure the supply of rice over this wet season.
Despite a sufficient supply of rice at present, economists warn that Laos could face a price hike should farmers stop selling rice until the new harvest season. Difficulty with the transportation of rice between production bases and markets could also cause a price hike.
Over the past several months the price of food has played an important role in driving the inflation rate in Laos, forcing the government to stockpile rice and release stocks to the market when the price increases.
Despite the falling price of rice, the price of pork, beef and chicken remains high. The government has set up reference prices for these goods but a number of traders have ignored them. Trade officials admitted that it was not easy to control the price of pork as demand for the meat is high.
“We have ordered foreigners to stop raising pigs as this business is reserved for Lao people, so there is currently a shortage of supply in Vientiane,” said one of the officials.
According to the Lao National Statistics Bureau, one of the main reasons for a lower rate of inflation in Laos was a lower fuel price thanks to lower prices in the world market. The government lowered the price of fuel several times over the past few months.
The National Statistics Bureau says that one of the main challenges for Laos to maintain low inflation, is to control the price of water and electricity supply, after finding out that household goods saw about a 19 percent increase after the government decided to increase the prices of electricity and water supply.
vientiane times
