VIENTIANE, Dec. 29 (Xinhua) -- The inflation rate in Laos averaged 31.23 percent for the whole of 2023 despite the government's attempts to lower the cost of goods and services to single-digit figures.

The weak kip (Lao currency) is seen as one of the main factors driving inflation. In addition, weak domestic productivity and the high value of imports ramped up pressure on exchange rates, according to the latest report issued on Thursday from the Lao Statistics Bureau.

Laos' inflation dropped from 40 percent in mid-2022 to 24.37 percent in December 2023, according to the report.

While inflation has eased since early 2023 in the Southeast Asian country, Laos still has one of the highest inflation rates in the region, causing real household incomes to fall for many people, and weakening consumption and investment.

The Lao government had hoped to reduce inflation to 9 percent by the end of 2023, but its attempts failed, so it has set the same target for 2024.

Dragging inflation down to the targeted 9 percent by 2024 from the current rate of almost 30 percent will be a huge challenge, said Lao Prime Minister Sonexay Siphandone at the sixth ordinary session of the National Assembly's ninth legislature, which was held from Oct. 31 to Nov. 21.

The Lao central bank, the Bank of the Lao PDR, will attempt to lower the rate of inflation to 9 percent or another single-digit figure by the end of 2024, by ensuring that the income earned from exports enters the banking system.

In addition, the central bank will improve the foreign trade market and make it easier for importers, exporters and investors to change foreign currencies and carry out transactions through the banking system. The central bank wants 70 percent of export earnings to enter the Lao banking system.

At the government's open meeting held from Dec. 26 to Dec. 27, Sonexay instructed concerned sectors to modernize the systems for collecting revenue, create new revenue streams and minimize financial leaks.

The concerned sectors also need to place greater emphasis on improving the investment climate and boosting domestic production to replace imports of items that Laos can produce for domestic consumption and export. Enditem

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