The year-on-year inflation rate in Laos jumped to 6.25 percent in January, the highest figure recorded since January 2020.
The cost of goods and services has continued to climb since March 2021 and jumped to 5.04 percent in November before rising to 5.27 percent in December, according to the latest report from the Lao Statistics Bureau.
The rising cost of fuel is one of the main drivers of inflation in Laos. The COVID-19 pandemic, especially the emergence of the Omicron variant, and the volatile fuel market have had huge consequences on the inflation rate in countries around the world, including Laos, the local daily Vientiane Times reported on Wednesday.
In addition, the steady depreciation of the Lao currency kip is making it even harder to curb inflation in Laos.
In January, the cost of goods and services was mainly driven by the communications and transport category, medical care and medicine, restaurant and hotel.
Costs in the communications and transport category rose by 1.26 percent month-on-month, and 13.72 percent year-on-year.
The surge in this category is linked to the price of oil and gas which rose by 29.53 percent year-on-year in January, affecting the cost of transport and the price of goods on sale in local markets.
Since the start of 2022, fuel prices have risen four times, hammering Lao consumers and their efforts to improve their living standards.
Meanwhile, the price of medical care and medicines rose by 0.9 percent month-on-month and 9.05 percent year-on-year.
Prices in the restaurant and hotel category surged by 0.55 percent month-on-month and 8.59 percent year-on-year.
According to the Lao Statistics Bureau, the internal factors driving the cost of goods and services were linked to rising demand in the food and non-alcoholic beverages category during the Spring Festival.
The cost of food and non-alcoholic beverages in January increased by 0.66 percent month-on-month and 4.17 percent year-on-year, with the price of pork and poultry rising significantly.
The Lao government is taking steps to boost productivity in order to reduce imports and control the rising price of fuel to ease the impact on the economy. The government has decided to cut Value-Added Tax from 10 to 7 percent this year, according to the report.