Tourists visit a night market along the Mekong River in the Lao capital Vientiane on June 30, 2023. (Photo by Kaikeo Saiyasane/Xinhua)
Lao households are struggling as living costs continue to rise while wages remain low amid high inflation. Over the past six months, the cost of goods and services has soared by 38.06 percent.
VIENTIANE, Aug. 1 (Xinhua) -- The cost of living in Laos continued to rise due to the depreciation of the Lao currency kip and high inflation, affecting household incomes and people's standard of living.
The year-on-year inflation rate in Laos eased to 27.8 percent in July, down from 28.64 percent in June.
In July, the hike in consumer prices was mainly driven by the food and non-alcoholic beverage category, which surged by 37.8 percent year on year, according to a report released by the Lao Statistics Bureau website on Sunday.
Depreciation of the Lao currency kip is one of the main factors driving inflation, as one-third of the goods used to calculate price rises are imported.
"I try to use only high-quality ingredients to make my food stand out. I need to raise the price due to increased ingredient costs, because I don't want to lower my products' standard by using low-quality ingredients," Saynathi, a food vendor in Vang Vieng, a tourism town in Vientiane province, told Xinhua on Sunday.
He said that another choice is quoting prices in foreign currency, especially Thai baht, since most of the ingredients are imported from neighboring countries.
A vendor prepares food at a night market in Vientiane, Laos, March 14, 2023. (Photo by Kaikeo Saiyasane/Xinhua)
"However, I also have a family to support. So, I understand the hardships that everyone has to face. We need to struggle to survive in this situation."
"To cope with the mounting financial pressures, me and my wife have substantially reduced the frequency of dining out and now prefer cooking at home to save money. Meanwhile, we are actively seeking ways to earn extra income."
Governor of Laos' central bank, the Bank of the Lao P.D.R., Bounleua Sinxayvoravong, told the fifth ordinary session of the National Assembly of Laos earlier this month that the surge in the cost of goods and services in Laos is closely linked to the depreciation of the kip.
Over the past six months, the cost of goods and services has soared by 38.06 percent.
Syvanh, a vendor in Vang Vieng told Xinhua on Sunday that most of his friends have relocated abroad to work because the wages paid in Laos are not keeping pace with the rising cost of living.
"We grow vegetables at home to save money and reduce unnecessary expenses. We make every effort to survive in this situation. Therefore, if things get worse, me and my wife also want to leave Laos for better-paid jobs in other countries," said Syvanh.
Depreciation of the Lao currency kip and skyrocketing inflation are the prime motives for Lao people to seek jobs in neighboring countries, resulting in labor shortages in Laos.
The rising cost of living and comparatively low wages are forcing thousands of Lao nationals to seek employment in other countries, with most seeking jobs in Thailand and South Korea.
People withdraw cash at ATMs in Vientiane, Laos, on Jan. 9, 2023. (Photo by Kaikeo Saiyasane/Xinhua)
Laos' central bank will continue to tighten its monetary policy to stabilize the value of the kip as part of efforts to curb inflation and minimize the impact on the economy and the living standards of ordinary people.
At the cabinet's monthly meeting for July, Lao Prime Minister Sonexay Siphandone instructed the relevant government bodies to make a greater effort to stabilize currency exchange rates, curb skyrocketing inflation, and address the high level of public debt.
On June 30, the politburo of the Lao People's Revolutionary Party central committee formed a high-level task force to address inflation, currency exchange rates, the rising cost of living, and foreign debt.
The move came as Laos is struggling to overcome severe economic and financial hardships, which have been worsened by the unfavorable global environment. The objective of the new task force is to intensify the solution to the current economic, financial and monetary difficulties. ■
