BANGKOK – Xay, an auto mechanic from Laos, has been working in Thailand for three years. A combination of rising prices and falling purchasing power back home mean that he is one of 286,000 documented workers who have left Laos for better opportunities over the border.
“Here I receive 550 baht (US$17) per day, compared to a bit over 100 baht (US$3) in Laos which barely made ends meet. I can learn new technology with better equipment here,” said Xay, who asked to use a pseudonym so he could speak freely.
Double-digit inflation is having a major impact on Laos’ labor market, according to the World Bank. While consumer price rises have eased to 11.2%, compared with 26.2% in mid 2024, many people are still struggling to make ends meet.
The bank says high inflation is persuading people to leave manufacturing and service sector jobs and take up farming or head abroad in search of higher incomes. As a result, private businesses face major staff shortages.
“The transformation of the labor market in Laos is astonishingly quick. Three years of high inflation and currency depreciation have reshaped work choices, eroded household living standards, accelerated migration, and undermined human capital development,” said World Bank Country Manager Alex Kremer, adding that families are using up their savings “and may eventually run out of coping mechanisms.”
Rising prices and a skilled labor shortage are not the only factors weighing on an economy predicted to grow 3.9% this year, underperforming Developing Asia, which the Asian Development Bank says will grow 4.9% in 2025.
Persistent weakness in the Lao kip is eroding purchasing power and raising the cost of servicing the country’s massive debt burden.
