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VIENTIANE, Nov. 22 (Xinhua) -- Inflation rate in Laos in the first nine months of 2016 was recorded at 1.17 percent, a decrease of 0.65 percent compared to the same period last year.


This is considered the lowest inflation rate recorded since 2009, with economists saying the falling inflation rate can be mainly attributed to the drop in fuel prices, reported local Vientiane Times on Tuesday.


According to the Bank of Laos, the July inflation rate stood at 1.97 percent before declining to 1.85 percent in August and 1.84 percent in September. In general, the inflation rate has remained lower than the rate of economic growth which was recorded at 6.9 percent this year. Since February 2015, the country's inflation rate has been reported at below two percent.


However, Leeber Leebouapao, a senior economist at Lao National Economic Research Institute, said that inflation is just the averaged prices of all categories. While the inflation stays low, prices in the food category have increased by five or six percent annually. The economist said the cost of living is relatively quite high in Laos.


Other economists, meanwhile, said low inflation can hurt the economy as businesses and individual consumers might postpone purchases, anticipating even lower prices.


Lao government has a policy to stabilize the currency exchange rate to create confidence in the business sector, keep product prices steady and boost the economy, said Vientiane Times. Commercial banks in Laos have lowered their interest rates for two consecutive years for both deposits and loans in line with a decision made by the Bank of Laos. Rates were lowered to stimulate investment in productivity and adequately meet market demand.

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