Lao Chicken Inflation in Laos rose to 25.6 percent in July from 23.6 percent in June, according to the latest report from the Lao Statistics Authority. Rising fuel and consumer prices and the continued devaluation of the Lao currency kip are among the main factors driving inflation, the bureau said. A landlocked country, this small country of 7 million is heavily dependent on imports and exports with its Southeast Asian trading partners. By disrupting supply chains and causing food and fuel prices to soar,…
Inflation in Laos rose to 25.6 percent in July from 23.6 percent in June, according to the latest report from the Lao Statistics Authority.
Rising fuel and consumer prices and the continued devaluation of the Lao currency kip are among the main factors driving inflation, the bureau said.
A landlocked country, this small country of 7 million is heavily dependent on imports and exports with its Southeast Asian trading partners. The Covid-19 pandemic has also put inflationary pressure on the country by disrupting supply chains and causing food and fuel prices to soar.
Shipping costs rose by more than 50%
Rising oil prices are affecting the transportation price index, leading to higher prices for commodities that depend on fuel production or transportation. The report shows that the cost of communication and transportation in July increased by 53.2% year-on-year.
Prices in the goods and services category surged 25.6% during the period, while the cost of healthcare and medicines jumped 30%.
In addition, the cost of food and non-alcoholic beverages, clothing, footwear and household goods all rose by about 20%, and the cost of housing, water, electricity and gas soared 19.7% year-on-year.
spiral debt crisis
Laos is facing one of its worst economic crises in decades, largely as rising debt is crippling the country’s finances and bringing it dangerously close to default.
Laos’ external and domestic debt has ballooned to more than $14.5 billion, according to the World Bank. About half of that is owed to China to fund projects including the newly opened $5.9 billion China-Laos railway linking the capital Vientiane to the Chinese border.
This is in line with Laos’ current Foreign exchange reserves are about 1.3 billion US dollars.
“The country is on the brink of default,” Anushka Shah, vice president and senior credit officer at Moody’s Investors Service, made clear in mid-June.
In early August, rating agency Fitch downgraded Laos’ long-term foreign currency issuer default rating to CCC-, meaning “vulnerable,” from CCC, just three notches away from default.
