Laos saw its inflation rate fall sharply from 38.86% in May to 28.64% in June, according to the Lao Statistics Bureau.
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Visitors at a tourist attraction in Vientiane. (Photo: VNA) |
Depreciation of the domestic currency, the kip, is one of the main factors driving inflation, which makes it challenging for the Lao government to curb the rising cost of goods and services.
In June, the cost of food and non-alcoholic beverage category rose by 42.73% year-on-year while transportation costs increased by 10.96%.
Costs of educational, postal, and events/entertainment services increased the least with rates of 0.2%, 0.44%, and 0.5% respectively.
Laos's central bank - the Bank of Laos (BOL) - has recently introduced a policy to stimulate the economy and increase the value of the kip. Under the policy, BOL allows commercial banks more flexibility in setting exchange rates based on the daily reference rate it sets, thereby narrowing the gap between the official market rate and informal one.
Although the inflation rate in the country is still high, its economy in the first six months of 2023 achieved a growth of 4.8%, Lao Minister of Planning and Investment Khamjane Vongphosy said, adding that the service sector, especially wholesale and retail activities, tourism, and transportation are a main factor that drives the economic growth./.