MOIT VIETNAM | In An Effort To Bring Stability To Inflation, Laos Has Instituted Macroeconomic Stabilization Measures.
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In An Effort To Bring Stability To Inflation, Laos Has Instituted Macroeconomic Stabilization Measures.
In an attempt to overcome economic difficulties and attain recovery, the Laotian government stressed the deployment of decisive measures to stabilize the exchange rate, limit inflation, expand trade, and attract investments during the regular government meeting in February.
Fuel prices have soared by 95% compared to 2021, and the high and persistent inflation rate that began in Laos in early 2022 has continued into early 2023, driving up the prices of essential goods such as food and gasoline. This situation has had a significant impact on Laotians' day-to-day lives. That is why taming inflation and restoring economic stability have been declared government priorities for the near future.
The inflation rate in Laos experienced a significant spike from 3.8% in 2021 to 23% in 2022. When compared to the corresponding period in the previous year, January witnessed a record increase of 40.3% and February a record high of 41.26%. The price of necessities like food, gasoline, and consumer goods has been steadily rising due to this, the highest inflation rate in Laos in 23 years. Case in point: in 2022, the price of rice surged from 8,500 Kip/kg to 14,000 Kip/kg, and pork prices surged by 23% when compared to 2021. As a result of the rise in business electricity rates, the Vientiane Ice Manufacturing Industry Association has announced a selling price adjustment.
While looking at Southeast Asian countries, Laos ranks among the ones with the highest inflation rates. Its residents' ability to make a living has taken a hit due to ballooning inflation.
As part of the regular February 2023 government meeting, Laos's official spokesperson, Ms. Thipphakone Chanthavongsa, briefed the press on the government's plans to stabilize the economy and tackle economic challenges. In the next phase, the government will take determined actions such as preventing the state budget from being lost, properly managing prices of goods and services, increasing agricultural exports, improving the national transportation network, and keeping a close eye on exchange rate fluctuations to implement appropriate policies in a timely manner. State-owned enterprises will also undergo decisive reforms and debt resolution plans.
By encouraging the use of domestic products and the application of technology in agricultural production, the Laotian government hopes to maximize the effectiveness of inflation control measures and adapt quickly. The goal is to increase the quantity and quality of exportable agricultural goods. The government's goal is to decrease the impact of inflation on people's standard of living by utilizing agriculture and agricultural production as strengths.
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