Vietnam - Vietnam’s NA Economic Committee forecasts inflation at 18.98pct in 2011

Inflationary pressure from now till the end of this year is said to be likely to increase, so the National Assembly’s Economic Committee said that the government’s target to keep CPI (consumer price index) this year at below 18% has now become more challenging.

Because the country’s inflation in September could be considered to exceed the peak of 2011 and inflation in August also remained very high at 23.02% from the same period last year.

Meanwhile, from now till the end of this year, inflationary pressure will be likely to increase due to pressure from the depreciation of the dong against US dollar, electricity price hike, salary hike, strong fluctuation of gold price on expected inflation and increasing pressure on investment demand and consumption by the end of the year.

Vietnam’s general inflation in 2011 (compared to December 2010) is forecasted to remain relatively high at 18.98%, the committee said.

In further analysis, the committee said that depending on the implementation of Resolution No. 11 together with the promotion of preferential credit for food and foodstuff production as well as credit growth control at below 17% and total money supply at no higher than 12% along with effort to curb electricity price hike till the end of 2011, Vietnam’s inflation will range from 17% to 21% with 70% reliability.

Also, with 70% reliability, Vietnam’s basic inflation (excluding food and foodstuff and energy) in 2011 is forecasted at 9.45% against December 2010, ranging between 9% and 9.9%.

It is reported that Vietnam’s general inflation is included in the top four with highest ratio in the world while in 2010 Vietnam’s inflation ratio was ranked at the 17th amongst 182 nations.

The Vietnam Institute for Social Science predicted the country’s inflation in 2012 (against December 2011) would slow down to 11.3% and even to one-digit level, the committee said.

The level of reduction will depend primarily on the drastic implementation of the Resolution No 11 till the end of 2012, of which, especially the efficient implementation of cutting down public investments, curbing credit growth at no higher than 18% and total money supply at less than 15% plus strong supply of food and foodstuff.

The country’s inflation is predicted to range from 7.9% to 14.7% with 70% reliability in 2012. The basic inflation is expected to reach 5.46% against the end of 2011 (ranging from 5.0% to 5.92% with 70% reliability).

Source: Vietbiz24.com

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