Thai floods drive up Lao inflation
The prices of some common household goods have seen a minor increase and are expected to rise further as Thailand, one of the region's major production bases, continues to be affected by severe flooding.
The Lao National Statistics Bureau unveiled its monthly price survey this week, which revealed that the price of eggs, condensed milk, cooking oil and sugar saw 0.6, 0.54, 1.97 and 0.75 percent increases respectively in October compared to September.
The bureau said that flooding in Thailand has driven up the price of imported goods and there is a possibility that prices will continue to rise because the floodwaters have undermined Thailand's ability to supply goods to regional markets.
A number of domestically grown vegetables like tomatoes, Chinese cabbage and morning glory saw a month-on-month price increase of 8 percent. The rising price of imported commodities and domestic goods caused a month-on-month Consumer Price Index (CPI) rise of 0.27 percent, leaving Laos' inflation rate at 6.66 percent in October.
According to the statistics bureau, the two main influences on the inflation rate in October were the cost of transport, which saw an annual CPI growth of 10.93 percent and the food and non-alcoholic drinks category, which saw 8.14 percent growth.
The year-on-year CPI of water supply, electricity and cooking gas; general goods and services; and post and telecommunication categories saw increases of 6.75 percent, 4.25 and 6.20 percent, respectively.
The CPI of clothes and shoes, alcoholic drinks and cigarettes, household goods and entertainment saw annual growth of 3.96 percent, 2.76 percent, 2.59 percent and 2.12 percent, respectively. The CPI of healthcare and education saw annual growth of 1.12 percent and 1.07 percent.
National Economic Research Institute Director General Dr Liber Leebuapao warned this week that Laos might face another wave of inflation due to the flooding in Thailand as Laos was heavily reliant on consumer goods from the neighbouring nation.
More than 50 percent of Lao imports come from Thailand and the sectors concerned should start to discuss plans and develop concrete measures to cope with the possibility of higher inflation, Dr Liber said.
Laos' inflation rate peaked at 9 percent from April to June before dropping to 7 percent and then 6 percent between August and October.
The inflation rate dropped after the government introduced measures to curb the rising price of goods and services, including the provision of soft loans for farmers to boost productivity.
vientiane times
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