Policy Notes on Food inflation and Child Malnutrition in the Lao PDR

Two World Bank policy notes look at how economic slowdown and other factors in the Lao PDR are affecting food prices and child nutrition.

Policy Note: Food inflation in the Lao PDR: Trends, Drivers and Impacts

The shows that food price inflation in Laos has surged into double digits since mid-2022, outpacing global and regional trends.

Findings include:

• Exchange rate depreciation caused food prices to accelerate more rapidly than core inflation.
• Rice exhibits greater volatility compared to overall food prices and other unprocessed foods.
• Food inflation increased at a faster pace in the north, where there is a deficit in staple foods and a higher reliance on food imports.
• While rice prices are subject to fluctuations in regional and global markets, the prices of pork and chicken are influenced mainly by domestic factors.
• International markets affect prices in some provinces, for example in Savannakhet and Bokeo, much more than in others. In Sekong and Khammuan, where rice is mainly grown for subsistence purposes rather than for sale, external influences are low.
• Food prices vary significantly across provinces due to limited market integration.
• Low-income urban households are at highest risk of falling into poverty due to inflation.

The policy note gives recommendationsn on shifting short-term policy responses to a comprehensive strategy aimed at stabilizing prices, mitigating the impact of food inflation on vulnerable households, and capitalizing on higher agricultural prices.

Policy Note: Determinants of Child Malnutrition in the Lao PDR

Child malnutrition, particularly stunting, remains stubbornly high in the Lao PDR. Progress in tackling this persistent problem stalled amid COVID-19 and subsequent economic difficulties.

Findings include:

• Children are more likely to suffer malnutrition if they live in a poor household, belong to an ethnic community, or live in a northern province.
• Stunting prevalence varies significantly across ethnic groups, with determining factors including household wealth, sanitation, use of skilled birth attendants, and number of young children in a family.

Recommendations are based on:

• Expanding the multisectoral nutrition convergence approach to target critical factors.
• Restoring macroeconomic stability to curb inflation and create fiscal space for strategic investment in health and nutrition.
• Scaling up conditional cash transfers with conditions tied to the critical factors affecting child nutrition.
• Increasing and diversifying food production and educating caregivers about food.
• Strengthening infrastructure, service delivery, and institutional capacity for water supply, sanitation, and hygiene services.

Last Updated: Sep 04, 2024