Shoppers at a supermarket in Vientiane, Laos. (Photo: VNA) Vientiane (VNA) – The AsianDevelopment Bank (ADB) has forecast that the inflation in the Lao People’sDemocratic Republic (Lao PDR) will average 23% in 2022 before falling to 10% in2023.
According to the ADB’s Asian Development Outlook (ADO) 2022 Supplement releasedon December 14, inflation continues to accelerate in economies throughout Asiaand the Pacific on high energy and food prices, mainly due to the Russia –Ukraine conflict. While global oil, gas, and food prices have fallen from theirpeaks earlier in the year, prices remain higher than before the conflict.
The bank alsoforecasts Laos' economic growth in 2022 will reach about 2.5%, down from thegrowth of 3.4% it estimated in its assessment made in April 2022.
The lender also lowered its economic growthforecast for Laos in 2023 from 3.7% to about 3.5%.
“Inflationary pressures are expected tocontinue in the near term, aggravated by central banks’ policy tighteningglobally amid a weaker local currency,” said ADB Country Director for the LaoPDR Sonomi Tanaka.
“It is important that coordinatedefforts are made to address the effects of currency weakness on domesticinflation—especially for food and fuel items—as price volatility on these goodsdisproportionally impacts the poor and vulnerable,” he said.
The financial institutionalso recommends developing a local currency government bond market in Laos tostrengthen economic recovery momentum and build resilience to future shocks./.
