Despite action by the government, Lao inflation is trending higher yearly and driving up the cost of living for ordinary citizens, state-run newspaper Vientiane Times reported on Wednesday.
Inflation has climbed from 6.83 percent in August to 6.87 percent in September, according to a report issued by the Lao Statistics Bureau this week. Economists are concerned that the rising rate of inflation could overtake the country's GDP growth rate.
Earlier this month World Bank published its biannual East Asia and Pacific Update which predicted total GDP growth for Lao PDR in 2013 to be at 8 percent. The report predicted that Lao PDR would see percentage growth fall to 7.7 percent in 2014 but a strong recovery to 8.1 percent in 2015.
The country's highest monthly inflation rate this year was 7.43 percent in July while the lowest was 5.45 percent in April. The yearly inflation rate in 2011 was 7.58 percent but that number dropped drastically to 4.26 percent in 2012.
Laos has one of the highest inflation rates among ASEAN countries due to the rising value of imports which the country strongly depends on.
According to a recent government report, the value of imports during the last six months of the 2012-2013 financial year totaled 1.16 billion U.S. dollars compared to exports, which totaled just 880 million U.S. dollars.
Recently local media reported that the Lao Government was planning to amend the Law on Value Added Tax (VAT) to remove tariffs on items that Laos cannot produce domestically in order to stimulate commercial production and export volume.
Vehicles and spare parts, industrial products, fuel and gas, construction equipment and food products are the biggest import items for Laos./.