Further Price Increase is Predicted Until the Year Ends

Source: Vientiane Times

Vientiane authorities predict that the current trend in price increases will continue at least until the end of this year and that prices in each product category will rise by 5-10 percent.

The figure was revealed last week by the Director of the Vientiane Industry and Commerce Department, Ms. Vanmany Phimmasane.

Ms. Vanmany said the reasons for the continuing rise in prices are complex but mainly result from a global economic slowdown, which has led to inflation in Laos and many other countries.

The situation is further exacerbated by home-grown problems in Laos such as spiraling living costs resulting from inflation in all sectors, which has driven up the cost of goods and services, while the weak kip is pushing up the cost of imports.

“In the first six months of 2023, product prices in the list of controlled products in category A continued to fluctuate, while products in category B that require close monitoring have remained comparable in price to those recorded over the same period last year.”

“The cost of production and labor rates, which are closely related to the cost of living, as well as currency exchange rates and inflation, all increased by an average of 40.25 percent in the first six months of this year,” Ms. Vanmany added.

Laos also suffers from a weak production base and high reliance on imported goods, including general consumer goods. The high cost of imported fertiliser and animal feed and vaccines, as well as machinery and equipment, has served to drive up the cost of farming and other essential areas of the economy and development.

When prices rise in other countries, there is a corresponding increase in the cost of goods on sale in Laos, Ms. Vanmany said.

The government has imposed price controls on 23 basic necessities such as pork, rice, and natural gas, to try to slow the rate of inflation, which recently rose to more than 40 percent.

Authorities are trying to control unwarranted price hikes by imposing fines, but capped prices on some products mean it’s hard for vendors to operate a viable business and make a profit.