Southeast Asia Information Port (www.dnyxxg.com) – The latest Consumer Price Index (CPI) data released by the Lao Statistics Department shows that Laos' inflation rate eased at the beginning of 2026, falling to 5.1% in January, a decrease from 5.6% in December 2025, indicating some relief from short-term inflationary pressures.
Although Lao prices were still higher than the same period last year in January, the overall inflation rate decreased by 0.2% month-on-month. This change was mainly due to lower food and fuel prices, providing a short-term relief to inflation. However, it is worth noting that inflationary pressures have not fundamentally eased, especially in the basic services sector. Data shows that the core inflation rate, excluding volatile items such as fresh food and fuel, reached 7.3%, highlighting the continued existence of potential price pressures; the non-core inflation rate rose by 2.7%, mainly affected by fluctuations in utilities, fuel, and gold prices.
Looking at the year-on-year increases, there are significant differences in price performance across different categories. Among the categories, housing, water, electricity, and fuel saw the most significant price increases, reaching 24.2%, primarily due to a 169.1% surge in electricity prices and a 42.7% increase in water prices. These price hikes continue to put pressure on household spending, with urban households being particularly affected.
In other major categories, prices for other goods and services rose by 32.1%, primarily driven by a 64.7% increase in gold jewelry prices; healthcare goods prices rose by 13.6%, with hospital service fees increasing by 24.5% and drug prices by 13.0%; education costs climbed significantly by 11.5%, mainly due to increased costs for school uniforms and extracurricular tutoring; and tobacco and alcohol prices rose by 8.3%. In contrast, the year-on-year price increase for food and non-alcoholic beverages was relatively moderate, at only 1.6%, with meat, poultry, and vegetable prices all showing a moderate upward trend.
From a month-on-month perspective, the decline in prices of some major consumer goods effectively offset some of the increases in utility costs. Food and non-alcoholic beverage prices fell by 1.2%, mainly due to lower prices for fresh produce such as coriander, lettuce, cabbage, oranges, and pork. Transportation and communication costs decreased by 0.4%, primarily driven by a 3.0% drop in fuel costs and a slight decline in vehicle costs.
However, housing and utilities prices rose by 5.3% month-on-month, partially offsetting the aforementioned declines. This increase was almost entirely due to a 31.1% rise in electricity prices in January. Furthermore, data shows that domestic inflation, based on 230 locally produced goods, was 6%, accounting for 69.3% of total consumption, higher than the 3.3% inflation rate for imported goods (accounting for 30.7% of the consumption basket).
Overall, while the January 2026 data indicates a slight easing of short-term inflation in Laos, the continued rise in utility costs and persistently high core inflation rate still pose significant challenges to Lao household spending and policymakers at the start of the new year.
