The inflation rate this month was 5.6%, up from 4.8% in November and 4.0% in October 2025.
Laos’ 5.6% inflation rate reflects continued price pressures, largely driven by higher electricity, water, and related household costs.
The Consumer Price Index (CPI) stood at 257.2, slightly down from 258.0 in November, but higher than the 243.5 recorded in December of last year, indicating continued year-on-year price growth.
The housing, water, electricity, and cooking fuel categories were the main drivers, surging 18.1 percent. This increase was driven by a sharp 105 percent jump in electricity prices and a 40.1 percent increase in water costs, coupled with higher construction and home repair costs.
Other categories saw significant price increases, including healthcare costs. And medicine prices increased by 14.4 percent, while education expenses rose by 11.4 percent. Clothing and footwear prices increased by 8.1 percent, household goods by 7.1 percent, and alcohol and tobacco products by 7.2 percent. The miscellaneous goods and services category saw the fastest increase at 29.2 percent.
The Lao Ministry of Finance stated that the price adjustments for clothing and household goods were linked to fluctuations in the Thai baht exchange rate, as most of these goods are imported from Thailand. The baht strengthened to its highest level in over four years against the US dollar during this period.
Despite the year-on-year increases, monthly prices decreased by 0.3 percent in December, providing a temporary mitigation. Food and non-alcoholic beverage costs decreased by 0.8% due to lower prices of vegetables, including spring onions, coriander, and cucumbers. Transportation and communication costs decreased by 0.6%, largely reflecting a 3.7% drop in fuel prices.
Overall, for 2025, the average inflation rate is projected at 7.7%, a sharp slowdown from 21.3% in 2024 and 31.2% in 2023, when inflation surged following the COVID-19 pandemic.