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Spiraling Inflation Forces Lao People To Cut Expenses

Source: MSN

Spiraling inflation in Laos is having a dramatic effect on people’s lives, even though the government has promised to garner more revenues to swell its coffers while reining in spending and stabilizing currency exchange rates.

Inflation in Laos hit a 22-year high at 34 percent in September 2022, according to an updated report from the Lao Statistics Bureau website.

The year-on-year inflation rate in Laos increased from 30.01 percent in August to 34 percent in September.

The 22-year-high price rise was driven by the surge in the price of food, medicines, fuel and other consumer goods.

A vendor sells food during Lao Food Festival 2022 in Vientiane, Laos, on Jan. 26, 2022. (Photo by Kaikeo Saiyasane/Xinhua)

With the cost of living continuing to rise, people from all walks of life in Laos are expressing their opinions on the economic crisis via interviews and also on social media platforms.

“It’s not easy to adapt to the spiraling cost of living. First of all, I think we should give up any unnecessary spending habits and not buy trendy things like expensive mobile phones or clothes. We have to be careful with our money and spend wisely,” Lattana Phonemany, a resident in the Lao capital Vientiane told Xinhua.

“I am also growing vegetables at my house. Reducing unnecessary expenses and trying to earn more money is the best way to deal with the situation.”

Savan Sommany, a part-time employee in Savannakhet, said “Now we have to try to save everything we earn.”

“As we all know, almost everything we use is imported and prices are greatly influenced by exchange rates. I think it’s important to drive up the value of the kip and put more locally-made goods on shop shelves.”

(Photo by Kaikeo Saiyasane/Xinhua)

 A vendor sells food during Lao Food Festival 2022 in Vientiane, Laos, on Jan. 26, 2022. (Photo by Kaikeo Saiyasane/Xinhua)

He added that the continuing depreciation of the kip is driving inflation and it costs businesses more and more to buy the foreign currencies they need to import goods.

“I hope that the government will be able to put things right very soon.”

Inflation in Laos has surged significantly since 2021, and the country now has one of the highest inflation rates in Southeast Asia.

The weak kip, the Lao currency, and growing demand for foreign currencies needed to import goods and repay debts are also the drivers of inflation.

The kip continues to depreciate despite the government’s efforts to regulate currency exchange rates.

Phonepaserd thonglit, a resident of Vientiane province, said that the cost of living is rising much faster than incomes.

“Almost everything we use is imported and prices are greatly influenced by exchange rates. I think we have to tighten our belts and try to be self-sufficient.”

“Most importantly, we should try to use products that are made in Laos and avoid anything that involves unnecessary expense.”

“It’s not only Laos that has a cost-of-living crisis. It’s commonplace in other countries as well. But Laos is particularly affected because we have to pay for goods with more foreign currency than we actually have,” she added.

People visit the Lancang-Mekong International Food Exposition in Vientiane, Laos, June 12, 2022.  (Photo by Kaikeo Saiyasane/Xinhua)

The 22-year high of inflation rate has made the headlines on social media in Laos, with the public showing their opinions on the economic woes.

“With this situation, we should not be extravagant, spend within our means, and make sensible decisions when it comes to spending.”

“I hope the authorities can do something soon because most people’s incomes are not keeping pace with the rising cost of living.”

“Some vendors use fluctuating exchange rates to their advantage, which is unfair, and I would like to call on them to stick to the rules.”

“We should do everything possible to save money and buy more Lao-made products than imported goods.”

In response to the economic woes, the Lao government has reiterated its pledge to avoid default with more proactive measures adopted to address the country’s economic problems.

The Lao government has instructed relevant agencies to take stronger actions to address issues ranging from macro-economic vulnerability, improvement of the investment climate and repayment of debts, to fight against natural disasters.

The instruction was issued during the government’s cabinet monthly meeting in August.