Lao inflation rate jumps to 3.4 percent in August
Lao inflation rate jumps to 3.4 percent in August
Laos' Consumer Price Index (CPI) reached 111.20 points in August, a 0.79 percent increase compared to the previous month, pushing the inflation rate to 3.4 percent.
According to a report from the Lao National Statistics Bureau released this week, the driving force of the rising CPI was the water, electricity and cooking gas category, which saw a 1.52 percent increase in August. Prices also rose in the transport category, which saw a 1.39 percent increase.
The government has approved an increase in electricity rates, which will rise by 3 percent from April to the end of this year, and by 2 percent from next year until 2017. Analysis shows that the rising cost of energy will be the main driver of inflation in the upcoming months.
The higher price index of the transport service category is due to the increasing price of fuel in recent months. Fuel price increases have also pushed up the production cost of goods and services.
The restaurant and hotel category index saw a 0.88 percent change, while the food category saw a 0.72 percent change, which also helped to drive up the index in August. The price index of other goods and service categories saw increases of between 0 and 0.43 percent.
The 0.79 percent increase in the CPI in August is considered to be a reflection of the growing rate of inflation. The index saw 0.24 percent deflation in July and 0.06 percent in June. If the CPI continues to rise at the August speed, it could drive up the annual inflation rate over the upcoming months.
The inflation rate was 3.4 percent in August, up from 2.92 percent in July. The inflation rate in June was 3.56 percent.
As well as being a major contributor to inflation in August, the water, electricity and cooking gas category saw an annual change of 13.93 percent, while the second largest contributing category of hotel and restaurant services saw an annual change of 9.54 percent.
The inflation rate of food prices in August was 4.22 percent, while of alcoholic drinks and cigarettes was 3.01 percent, and for clothing and shoes it was 1.49 percent. In the household goods category, the inflation rate saw an annual change of 2.52 percent, post and telecommunications saw a 0.47 percent change, and transport services saw a 0.42 percent change. The entertainment and recreation service category saw an inflation rate of 0.58 percent, while in the education category it was 1.63 percent.
One of the measures the government imposes to curb inflation is to regulate food prices. The government is setting up a reference price for rice, pork and other food items.
The government also limits the export of rice to neighbouring countries, which helps to keep the price stable. However, the subsequent low price of rice can discourage cultivation in the upcoming season, which may lead to a shortage.
Economists say that one of the best ways to keep food prices stable is to boost productivity to ensure a sufficient supply of goods.
vientiane times
