Parliamentary debates centre on skyrocketing inflation, kip depreciation

National Assembly members have called on the government to take stronger action to handle spiralling inflation and currency exchange rates to minimise the hardships faced by the general public.  
Senior government officials were bombarded with questions by NA members, who expressed their concern over the continuing dire state of the economy, with more and more people leaving Laos for better-paid jobs in other countries.

NA members debate economic issue, asking the government to do more to overcome challenges.                                                                                                --Photo Sangkhomxay

According to a government report, year-on-year inflation averaged 40.26 percent over the past five months, with inflation peaking at 41.3 percent in February. 
NA member for Savannakhet province Mr Xayadeth Ouyavong told the ongoing debate session that the government must tackle the resulting labour shortage.
“Workers have left factories in Laos for jobs in other countries because the wages paid by factories here are not keeping pace with the rising cost of living,” he said.
“Continuing depreciation of the kip and rising apartment rents are worsening the situation. As a result, factories in Laos are facing a labour shortage.”
NA member for Saravan province Mr Siheng Homsombath said the government needs to review the minimum wage and ensure that salaries reflect economic realities.
“The government needs to boost productivity and reduce imports of goods that can be produced in Laos. In addition, a stronger campaign is needed to make people aware of the need to buy products that are locally made.”
NA member for Savannakhet province Ms Xayxomxeun Phothisan said the economic woe was affecting household incomes, resulting in the decline of school enrolment rate. Poverty was cited as the main cause of school dropouts and lack of teachers is affecting education system.
She also asked the government to increase the salaries paid to state officials, especially teachers, as part of efforts to improve the quality of education in Laos.   
NA member for Huaphan province Dr Sthabandith Insisienmay said it was essential to stabilise the kip and ensure that financial transactions of all kinds are conducted in kip.
The Governor of the Bank of the Lao PDR, Dr Bounleua Sinxayvoravong, responded by saying that the government has imposed a number of measures to deal with rampant inflation.
The government will reduce the financial deficit and regulate foreign currencies while also promoting foreign investment and tourism, he said.
He advised limiting the import of luxury and non-essential goods that require large amounts of foreign currency, while reducing the use of foreign currencies in Laos, saying that the rising cost of goods and services is directly linked to the depreciation of the kip.
The government will also do more to regulate the price of goods on sale in markets, to prevent consumers being overcharged by vendors.
Dr Bounleua said the central bank will take steps to ensure that foreign currency earned from foreign investment, exports and tourism enters the banking system instead of being channelled elsewhere.

By Somsack Pongkhao
 (Latest Update June 30, 2023)