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Govt steps up to tackle inflation
The government has put the battle against rising living costs at the top of its agenda as the country continues to experience growing inflation.
Standing Deputy Prime Minister Somsavat Lengsavad yesterday called a special meeting of ministers, senior officials and economists to discuss measures to curb the rising inflation rate. Inflation reached 9.24 percent in April, higher than GDP growth over the first six months of the current fiscal year.
“We are facing big challenges and a high risk of macro-economic instability, one of the clear indicators of which is the rapid increase in the inflation rate,” he said at the opening of the meeting held at the Prime Minister's Office in Vientiane.
“Inflation is rooted in external and internal causes and therefore I propose the meeting concentrate on the internal causes,” he said after urging participants to provide frank comments and suggestions.
The government made a commitment to the National Assembly at the end of last year that it would keep inflation below GDP growth figures.
Real GDP growth reached 8.3 percent over the first six months of this fiscal year, higher than the target of 8 percent but increasing inflation is posing a major challenge. Inflation has continued to rise from 6.06 percent in January to 6.66 percent in February and 7.73 percent in March, and reaching 9.24 percent in April.
The main drivers of the rising inflation rate are increasing fuel prices in world markets and higher food prices due to insufficient supply. The price of beef has jumped after cattle deaths in a disease outbreak earlier this year.
According to a report from the government secretariat, one of the measures the government is expected to take is to engage the public, in a bid to keep the prices of various commodities low in line with market mechanisms.
The campaign would appeal to traders and businesspeople not to be greedy in times of economic hardship as doing so will cause macro-economic instability, which could lead to the collapse of their own business.
The government will keep a close eye on the management of prices of strategic commodities such as fuel, cement and steel. It will also prepare a rice stockpile over the upcoming harvest in a scheme aimed at releasing the grain onto the market and bringing down prices at times of rising food costs.
Another measure the government is expected to introduce is to provide some funding for enterprises to increase food production to ensure sufficient supply.
The government will also boost efforts to collect revenue as planned while spending investment funds in accordance with approved plans.
Minister of Finance Somdy Duangdy and Bank of the Lao PDR Governor Phouphet Khamphounvong attended the meeting.
vientiane times
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