Inflation is estimated to have accelerated to 5.7% in 2010, after a year of stable prices in 2009. Year-on-year inflation reached around 8% in August-September 2010, owing to a disappointing harvest, as a result of which the government was forced to sell down its stocks of rice. Inflation accelerated again in early 2011, from 6% year on year in January to 7.7% in March. Rising food prices in Thailand and a strong Thai baht will continue to push up prices in Laos, as around 70% of the country's imported goods come from Thailand. Another source of inflationary pressure will be continued rapid growth in the money supply, which is itself driven by strong inflows of foreign investment. We expect these factors to drive up inflation in 2011, to an average of 7%. A moderate fall in global food prices will cause local inflation to slow to 6% in 2012.