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Laos: Inflation rate declines
Inflation continued to decline in August after the government introduced measures to curb the rising price of goods.
The National Statistics Bureau told Vientiane Times yesterday that inflation dropped to 6.29 percent in August, lower than the July rate of 7.13 percent. The inflation rate was higher than GDP growth at 9.52 percent in June and 9.76 percent in May.
According to the National Statistics Bureau, the driving forces of inflation in August remained the price of transport, food and non-alcoholic drinks, which saw an annual CPI growth of 11.67 and 7.16 percent respectively.
The year on year CPI in the water, electricity and cooking gas category saw a 4.95 percent increase, while the CPI of household goods saw a 1.94 percent increase.
Post and telecommunica-tion services saw an annual CPI growth of 4.23 percent, while the entertainment and recreation category rose by 2.40 percent.
Healthcare increased by 0.27 percent while the annual CPI of educational goods saw 0.58 percent deflation. Restaurants and hotels experienced annual CPI growth of 5.61 percent.
The declining inflation rate was attributed to government measures to curb the rising price of goods in recent months, in response to fears that higher food prices would have a negative impact on public and state investment projects.
The Bank of the Lao PDR has stopped providing loans for state infrastructure development in a bid to tighten money supply, and has encouraged commercial banks to issue loans to farmers so they can boost production and ensure food supply to markets.
Deputy Prime Minister Somsavat Lengsavad told planning and finance officials last week that a battle against inflation was one of the government's top priorities. They were requested to help address the issue because it will not only have a negative impact on state investment projects but also on the cost of living.
The government is considering suspending import tax on some agricultural equipment and fertilisers, to help farmers boost production in the upcoming dry season and replace crops that were damaged by flooding.
Economists said flooding in central and southern parts of the country would pose big challenges for the government in curbing inflation.
Flooding had not only destroyed the production base but also made transport and the regular supply of goods difficult.
vientiane times
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