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BRIEF

Household Welfare Monitoring in the Lao PDR

A woman buys meat at a fresh market in Vientiane, Laos.

Workers have left positions services for jobs in food production and self-employment as inflation erodes the value of wages. 

Photo: World Bank © Philippe Aramburu


New: Round 9 Survey

The World Bank in the Lao PDR began a series of Rapid Monitoring Phone Surveys in 2020 to monitor the social and economic impacts of COVID-19 on Lao households. Following the end of the pandemic, surveys continue so that data is available for the ongoing economic challenges. These surveys are now funded by the Australian Government’s Department of Foreign Affairs and Trade and the European Union through the Lao PDR Third Public Financial Management Reform Program, implemented by the World Bank. The latest round, the ninth, ran from May 31 to June 30, 2024.

Following the slowdown enforced by the pandemic, the Lao economy has been severely affected by internal and external factors that have taken a toll on household living standards. Domestically, currency depreciation and high inflation, resulting from high levels of external debt and low foreign exchange reserves, have led to rising prices, particularly for imported fuel, food, and medicine. From July 2023 to June 2024, the Lao kip depreciated by 14% against the US dollar at official rates and by 29% in the parallel market. The year-on-year inflation rate stood at 26% in June 2024, with food inflation at 24%.

Prolonged high inflation has changed the labor market, affected household living standards, and undermined human capital development. As 80% of Lao households are net food buyers, rising food prices are having widespread effects, and these ongoing surveys provide insights into the distribution of the impact on Lao families so that actions can be tailored to maintain food security.

This webpage provides links to the results of all survey rounds, plus a report on public service delivery and citizen expectations from the government response to COVID-19, drawing mainly on results from the second survey round. Round 6 was accompanied by a qualitative survey, conducted in late 2022 to provide a better understanding of how rural people perceived the economic and social impacts of both the COVID-19 pandemic and the deteriorating economic situation, particularly spiraling inflation.

The survey questionnaire is designed to cover themes such as access to staple foods, food insecurity, employment, the impact of inflation on households, family businesses and farms, economic activities and income, coping mechanisms, and access to social assistance. The results of further rounds of the survey will be published as they become available.


Logos of AusAid and the EU in Laos

The rapid mopnitoring surveys are funded by the Australian Government and the European Union through the Lao PDR Third Public Financial Management Reform Program, implemented by the World Bank.


Latest Key Results

  • Employment remained robust in the first half of 2024, with less than 1% of respondents reporting being unemployed while seeking work. More women are entering the workforce.
  • Average wage growth is modest, at 8% in the year to May 2024, significantly below the 26% inflation rate.
  • High inflation, currency depreciation, and slow wage growth have encouraged movement of labor toward jobs with higher returns, from services to agriculture and manufacturing, and from wage and unpaid family employment to self-employment. The shares of workers in agriculture and in self-employment have continued to rise.
  • More than half of households are engaged in commercial agriculture, mainly in fish, cassava, and rice production. Pests, disease, and weather-related issues are the major challenges for agricultural production. A quarter of commercial farm households experienced drought, with low-income farm households being more susceptible to weather and climate-related shocks.
  • Average profits from non-farm family businesses grew by 15% in the year to May 2024, faster than average wages but still behind inflation.
  • Depreciation of the kip, coupled with persistent inflation, is fueling outmigration. The number of Lao migrant workers in Thailand is now estimated to have surpassed pre-COVID-19 levels.
  • Average household income per capita rose by 14% in the year to May 2024, against a 26% inflation rate for the same month. The proportion of households reporting improved income from the previous year declined from 62% in December 2023 to 56% in May 2024.
  • The proportion of households reporting a significant negative impact from inflation increased from 53% in January 2024 to 58% in June 2024.
  • Scaling up own-food production remains the most widely adopted strategy for coping with rising food prices, with households also increasingly reliant on foraging activities. Fewer households report engaging in additional income-generating activities or taking loans from financial institutions. Less than 3% of households report having received government assistance to help them cope.
  • The share of households reducing food consumption or consuming cheaper food items has continued to decline across all socioeconomic groups. Despite this, about 63% of low-income households still report reducing their food consumption.
  • Among households reducing their food intake, 94% have cut back on meat and fish consumption, a figure that rises to 97% for low-income households. This reduction in protein is expected to hinder progress in nutrition and child development.
  • Food security continues to improve, but nearly a third of households remain food insecure, while concern about food security has increased from the previous year.
  • The impact of inflation on human capital spending continues to ease but remains significant: 31% and 34% of households report cutting education and healthcare spending due to inflation. 82% of households report cutting back on their savings, a 12-percentage point increase from January 2024.
  • In June 2024, 8% of school-age children were out of school, with the figure rising to 11% among children from low-income families.

Last Updated: Sep 03, 2024



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