Source: Vientiane Times
The Governor of the Bank of the Lao PDR (BOL), on behalf of the government, informed National Assembly members on Wednesday that the central bank will attempt to reduce the inflation rate to 9 percent in 2023.
The announcement comes in the wake of spiralling inflation throughout 2022, with the rate jumping from one to two digits in May and most recently recorded at 38.46 percent.
Skyrocketing inflation is causing great hardship and people are desperately wondering how they can survive as prices across all categories hit record highs.
Inflation topped the list of NA members’ questions this week, as they demanded that the central bank and other government agencies seek solutions to the country’s manifold economic problems.
In response to questions raised by NA members on Wednesday, BOL Governor Dr Bounleua Sinxayvoravong said the central bank will immediately revise and improve measures to bring inflation under control and reduce the rate to 9 percent next year.
At the same time, the bank will address other unresolved financial and monetary issues.
The government is prioritising the stability of the kip and the regulation of exchange rates, as well as the management of M2 money supply and building up foreign currency reserves, while also encouraging commercial banks to attract more depositors, Dr Bounleua told Assembly members.
“The BOL as the central bank, on behalf of the government, will encourage commercial banks to enlarge their capital or increase the number of depositors while continuing to issue loans to efficient investment entities, especially those which plan to produce goods for domestic supply in order to reduce imports,” he said.
Micro, small and medium-sized enterprises (MSMEs) will be given priority in accessing funding so they can boost their contribution to GDP.
In other measures aimed at financial stability, the BOL will require commercial banks to keep non-performing loans at 3 percent in 2023.
Laos’ first double-digit inflation rate was recorded in May at 12.81 percent and hit a record 38.46 percent last month.
The Consumer Price Index (CPI) rose by a record 166.18 percent, up from 164.31 percent in October, according to figures posted on the Bank of the Lao PDR’s website.
The ongoing NA session will debate numerous economic and financial issues as well as other important topics, with the session ending on December 30.