How is inflation affecting your living standards?

Spiralling inflation is having a dramatic effect on people’s lives, even though the government has promised to garner more revenue to swell its coffers while reining in spending and stabilising currency exchange rates in the hope of improving matters. With the cost of living continuing to rise, Vientiane Times asked for opinions on the economic crisis.

Ms Phetsada, an employee in Sikhottabong district, Vientiane: Today living expenses are rising much faster than our incomes. Almost everything we use is imported and prices are greatly influenced by exchange rates. This means we have to be careful with our money and spend wisely. We should not be extravagant, spend within our means, and make sensible decisions when it comes to spending.
 
Mr Air Phutthakone, a farmer in Saravan province: I hope the authorities can do something soon because most people’s incomes are not keeping pace with the rising cost of living. Imported goods in particular are now more expensive than ever, while rising prices, especially of fuel, have driven up the cost of production. I think it’s important to shore up the value of the kip and put more locally-made goods on shop shelves.

Mr Vannasouk, a government official in Vientiane: I think this is a difficult problem to tackle because the main reason is the mismatch in the supply and demand of the Thai baht and US dollar. One of the main challenges for the government is the dire need to service its debts, while there is an ever-increasing demand for foreign currencies so that people can buy imported goods. This has contributed to the currency exchange problems we have today. The continuing depreciation of the kip is driving inflation and it costs businesses more and more to buy the foreign currencies they need to import goods. The situation is not helped by the fact that foreign currency availability at banks is limited. This creates openings for alternative or illicit ways to purchase foreign currencies, which drives up the exchange rate. More people are taking advantage of the situation by setting up illegal currency exchange operations, especially online.
 
Ms La, a resident of Luang Prabang province:  It’s not only Laos that has a cost-of-living crisis; it’s commonplace in other countries as well. But Laos is particularly affected because we have to pay for goods with more foreign currency than we actually have. This is one reason why the value of the kip is so low. Another problem is that Lao people like to buy things from other countries. Many of the things we need are not made in Laos, so we have to import them. It would be good if the government could solve this problem because it affects our standard of living. Some vendors use fluctuating exchange rates to their advantage, which is unfair, and I would like to call on them to stick to the rules. However, concerning currency fluctuations, we should do everything possible to save money and buy more Lao-made products than imported goods.
 
Ms Phoy Soutthivong, a resident of Vientiane: It’s all about the government showing responsibility and taking the right steps to get us out of this mess. The government should introduce rules to control currency exchange rates. There should be limits on currency exchange operations and people should be encouraged to change money only at banks. Everyone should try to use the kip when buying and selling things, as this will help strengthen its value.

By Lamphone Pasanthong
(Latest Update October 19, 2022)