Lao Government Aims to Reduce Inflation to Single-digit by 2023

This aerial photo taken on Feb. 7, 2023 shows the view along the Mekong River at Lao capital Vientiane. Photo by Kaikeo Saiyasane/Xinhua

VIENTIANE -- Laos' central bank, the Bank of the Lao PDR (BOL), is aiming to drag inflation, which was recorded at 39.89 percent in April, down to an average of single digit in 2023, local media reported.

"Dragging inflation down to one digit is the greatest challenge," Lao National Radio on Wednesday quoted the Director General of the Monetary Policy Department of BOL, Soulysak Thamnuvong, as saying.

The big challenge remains despite the central bank employing key tools to cope with high inflation.

Although the central bank has increased interest rates three times, issued multibillion-worth bonds and increased reserve ratios to cope with high inflation, the inflation rate in Laos only slightly dropped from a record high of 41.26 percent in February to 40.97 percent in March and 39.89 percent in April. The average inflation over the first four months of 2023 remained at 40 percent.

The country's inflation has increased significantly since the beginning of 2022, with rising prices continuing to inflict hardship on people struggling to earn a living.

Inflation in Laos climbed from 6.25 percent in January 2022 to 41.26 percent in February 2023.

Laos' annual average inflation rate was 23 percent in 2022, jumping from 3.8 percent in 2021. 

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