September 6, 2024
VIENTIANE – While food security has improved in Laos, high inflation and stagnant wages continue to erode living standards, driving more Lao workers abroad, according to the latest World Bank Household Monitoring Survey.
The ninth round of the World Bank’s Rapid Monitoring Phone Surveys, conducted from May to June 2024, indicates that while employment remains strong with less than 1 percent of respondents reporting unemployment, average wages increased by only 8 percent from January to May.
This wage growth lags far behind the inflation rate, which stands at 26 percent. As a result, the number of households experiencing significant negative impacts from inflation rose from 53 percent in January to 58 percent in June.
Persistent inflation is a key factor behind the rising out-migration from Laos, with the number of Lao migrant workers in Thailand now exceeding pre-pandemic levels.
The survey shows that 93 percent of international migrants cited better pay and job prospects as their primary reasons for leaving Laos in 2024, up from 73 percent in 2023.
Domestically, high inflation, currency depreciation, and slow wage growth are prompting workers to shift to higher-paying jobs, often moving from services to agriculture and manufacturing, or opting for self-employment. Meanwhile, more women are entering the workforce.
According to the report, the most common strategy for coping with rising food prices has been scaling up household food production, with families increasingly relying on foraging and cutting back on meat and fish consumption, which is affecting nutrition and child development.
“While there are positive signs, such as fewer families reducing food consumption, some worrying trends remain,” World Bank Country Manager for Laos, Alex Kremer said.
“About 63 percent of low-income households still report reducing their food consumption, and almost all families are cutting back on meat and fish, which is likely to impact child nutrition across the country,” he added.
Despite some improvements, nearly a third of households remain food insecure, and concern about food security has increased compared to the previous year.
Additionally, inflation continues to impact spending on essentials, with 31 percent of households cutting education expenses and 34 percent reducing healthcare spending. Among low-income families, 11 percent of school-age children are out of school.
The report highlights that less than 3 percent of households have received government assistance to cope with the economic challenges, and 82 percent of households report cutting back on savings—a 12-percentage point increase from January 2024.
The month-on-month inflation rate was registered at 2.2 percent in July and at 1.1 percent in August, while the year-on-year figure was 26.10 percent for July and 24.3 percent for August, according to the latest updates on the website of the Lao Statistics Bureau.