VIENTIANE, Oct. 20 (Xinhua) -- The Lao government has instructed the relevant authorities to take urgent measures to address the continuing economic and financial difficulties with respect to inflation, unfavorable currency exchange rates, spiraling prices, and foreign debt.
During the cabinet's monthly meeting for October, the Lao government urged actions to boost national revenue while promoting frugal spending to ensure effective use of the state budget in overcoming economic challenges.
Due to budgetary tensions, depreciation of the Lao currency kip and the high volume of foreign debt, the Lao government is cutting its spending and funding only priority programs.
Meanwhile, representatives from the Lao government and business sector in Lao capital Vientiane met on Tuesday to discuss and share ideas about finding solutions to the economic and financial difficulties.
One of the main challenges for the government in the coming months will be to rein in inflation, as the continuing rise in the cost of goods and services is creating extra hardship for poverty reduction.
Laos' inflation eased slightly in September at 25.69 percent, down from 25.88 percent recorded in August.
The Lao government has put many measures to manage and maintain monetary stability, such as increasing interest rates, the ratio of compulsory deposits and issuance of bonds.
Senior economist and Dean of the Faculty of Economics and Business Management of the National University of Laos (NUOL), Phouphet Kyophilavong, told the media in an interview on Monday, "In order to stabilize exchange rates and deal with economic challenges, we need to bring in more foreign currency by increasing the value of exports, tourism and foreign investment."
Phouphet said exporters should ship more agricultural products on the China-Laos Railway to help boost foreign exchange earnings.
He said that although Laos faces severe economic challenges including skyrocketing inflation, continuing depreciation of the kip and high public debt, the country has strong potential to boost economic growth in 2024 when Laos becomes the ASEAN Chair and launches the Visit Laos Year 2024 program.
On Oct. 9, Lao President Thongloun Sisoulith issued a decree that imposes higher excise taxes on certain goods, aimed at curbing the import of luxury items in a bid to reduce the outflow of foreign currency. The decree supports finance officials' efforts to tighten control on currency exchange in a bid to reduce the rate of inflation and strengthen the value of the Lao currency kip.
The International Monetary Fund (IMF) has maintained the economic growth forecast for Laos at 4 percent in 2024, but inflation remains key challenge, according to its press release issued on Wednesday.
The projected growth is driven by exports and tourism, with the China-Laos Railway boosting the regional economy and improving accessibility so that more foreign visitors can come to Laos. ■
