Vietnam - Vietnam’s inflation falling: ANZ

Mr Warren Hogan, Chief Economist of ANZ on March 22 assessed that the inflation of Vietnam is falling positively but may still stay at two-digits until the second of 2012.

The assessment was made at the bank’s seminar on updating US-EU economic crisis and Vietnam’s economic restructuring.

A fall in Vietnam’s inflation is attributed to the effective measures such as policy tightening, slower global and regional growth, and lower goods prices. The inflation could go down to single digit in the H2 of 2012, however the price increase risks remain being there, especially from rises in petrol prices and food prices in the world market, he explained.

He also warned that other risks affecting to Vietnam’s inflation are over-relaxed and too early monetary policies. The relaxing of monetary policies should only be implemented gradually to keep inflation expectation.

“Boosting growth may not be prioritized yet. We expect the State Bank of Vietnam (SBV) would cut policy interest rates but only gradually within this year, with total reduction of around 4% for whole 2012”, he said.

According to ANZ, 2012 GDP growth of Vietnam will remain at around 6%. If inflation decreases and stands at single digit the GDP growth could return to the potential levels of 7-7.5%”, Mr Warren predicted.

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