"The weak kip has resulted in a decline in per capita GDP from 2,595 U.S. dollars in 2021 to 1,824 U.S. dollars in 2023," Lao national TV on Thursday quoted Lao Minister of Planning and Investment Khamjane Vongphosy as saying at the ongoing sixth ordinary session of the National Assembly's ninth legislature.
He added that the government plans to increase the figure to 2,880 U.S. dollars by 2025.
These figures indicate that people's incomes have declined in real terms amid the rising cost of living. The minister said depreciation of the kip is one of the main factors driving inflation and soaring prices, which is having a severe impact on people's standard of living.
Economic growth reached 3.5 percent in 2021 and 4.4 percent in 2022. The growth rate is projected at 4.2 percent in 2023 and 4.5 percent in 2024.
However, the inflation rate averaged 33.69 percent over the past nine months, although it dropped from 41.26 percent in February to 25.69 percent in September.
The Lao government had hoped to reduce inflation to 9 percent by the end of this year, but its attempts could fail, so the government has set the same target for 2024.
In addition, Khamjane said the kip had dropped in value by 18.4 percent against the U.S. dollar in September compared to the figure recorded at the end of 2022.
The government has pledged to stabilize exchange rates to slow inflation and increase foreign currency reserves to help the country overcome the challenges it faces.
The minister acknowledged that the government will need to do more to tackle economic and financial difficulties.
"In recent years, the government has attempted to improve the quality of state services, create job opportunities for local people to alleviate their poverty, and build infrastructure needed to facilitate agricultural production and income generation for local people," Khamjane said.
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