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Govt targets 5-6.5 percent inflation
The government is aiming to lower the inflation rate to 5-6.5 percent this fiscal year in an effort to minimise the effects on the general public, especially low income earners.
In April, the inflation rate jumped to 9.24 percent, the highest in four years. This figure is also above total GDP growth for this year.
A senior economist, Dr Liber Libuapao, from the National Economic Research Institute told Vientiane Times on Friday the government needs to curb inflation before it erodes the savings of poor people and damages the national economy.
Dr Liber talked to the press after attending a two-day special meeting in Vientiane last week that brought together officials from around the country to identify measures to curb inflation.
“Some officials recommended that banks reduce the number of loans they're issuing to the business sector for construction and infrastructure, and provide more funding for production so that consumption needs can be met,” he said.
“The price of food has increased rapidly since last year. What we need to do now is review the list of products that are seeing price rises so we can begin to assess the reasons and look at supply and demand.”
The government has identified some key measures to deal with inflation in the near future. These include saving fuel and increasing loans for commercial production, particularly for this year's wet-season rice crop.
Another measure is to relax loan repayment conditions for farmers whose crops were affected by floods and water shortages.
The Ministry of Finance needs to boost efforts to collect tax revenues in accordance with the government's plan.
The key responsibility of the Ministry of Industry and Commerce is to manage product prices in markets, including food, construction and farming equipment, and household goods.
The Commerce Ministry has been encouraged to create more rice stockpiles so the government can stabilise prices at times when they rise.
The government will also prioritise state investment projects to ensure they are highly beneficial to society and facilitate foreign and domestic investment.
Laos is considered to be a consumer nation as the value of its imports is greater than its exports. In the past six months of 2010-11, the value of imports reached US$1,047.9 million while exports reached only US$836.5 million.
Since the start of this year, inflation has continued to rise, from 6.06 percent in January to 9.24 in April.
Inflation is thought to be triggered by the rising price of food, transport, residential housing, water, electricity and products reliant on fuel.
Some officials and low-income earners are complaining about the rising inflation and urge the government to address the issue quickly.
The Lao Federation of Trade Unions, Ministry of Labour and Social Welfare and the Lao National Chamber of Commerce and Industry have agreed in principle to increase the minimum wage to improve living standards, but little progress has been made in this direction.
vientiane times
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