VIENTIANE, June 9 (Xinhua) -- The year-on-year inflation rate in Laos dropped to 38.86 percent in May, down from 39.89 percent in April, according to the Lao Statistics Bureau.
Laos' inflation rate dipped slightly to 40.97 percent in March and 39.89 percent in April after Laos passed the peak of headline inflation recorded at 41.26 percent in February 2023, according to a report released by the Lao Statistics Bureau website on Friday.
However, the figure remains sky-high, causing real household incomes to fall for many people, weakening consumption and investment.
Depreciation of the kip (Lao currency) is one of the main factors driving inflation, as one-third of the goods used to calculate price rises are imported.
In May, the hike in consumer prices was mainly driven by the food and non-alcoholic beverage category, which surged by 52.69 percent year-on-year.
This was followed by the medical care and medicines category at 40.78 percent, hotel and restaurant category at 38.73 percent, household goods at 35.65 percent, and clothing and footwear category at 28.34 percent.
The Lao government has pledged to tighten currency exchange rates and expenditure and boost domestic revenue.
Laos' central bank, the Bank of the Lao PDR (BOL), has announced the establishment of a new department to regulate foreign currencies on June 1, aiming to monitor the inflow and outflow of foreign currencies and stimulate wider use of the kip.
Meanwhile, economists say it is critical for Laos to boost production levels in order to reduce the volume of imported goods, as a means to revitalize the economy in the long run, according to the report.