Laos owes billions to China and it can’t get inflation under control

Suffocating under a mountain of debt to China, communist Laos is struggling to tame rampant inflation, with food prices rising so sharply that a growing number of households are resorting to foraging.

At a market in Vientiane, traders said they have never known business to be so slow, as families have seen the value of their money collapse.

While the Covid-19 pandemic and Russia’s invasion of Ukraine sent prices around the world spiralling, Laos has found itself incapable of putting the brakes on inflation.

Prices rocketed 23 per cent in 2022 and 31 per cent last year, while they are on course for 25 per cent this year, according to the Asian Development Bank (ADB).

Families in particular have been hit hard as the cost of basic staples such as rice, sugar, oil and chicken doubled last year.

A growing number of households are so desperate for food that they are now having to forage to supplement their diets, according to a World Bank household survey earlier this year.