Vietnam’s inflation rate, which skyrocketed last year, eased to 3.31 percent in July, according to the latest figures from the General Statistics Office.
The consumer price index (CPI) for the January-July period this year was 9.25 percent year-on-year, driven mainly by increased food prices.
In the same period last year, the CPI stood at more than 21 percent and the full-year rate was 22 percent and the price of fuel and building materials soared.
The General Statistics Office said food prices increased 12.94 percent in the first seven months of this year. On a monthly basis, the consumer price index (CPI) rose 0.52 percent in July from June.
“Overwhelming” factors
Over the past three months, inflation was being driven higher by sharp increases in the cost of fuel and food, including milk and sugar. Vietnam’s heavy dependence o¬n imports of essential goods and fuel, including petrol, should also be blamed for the price increases. Higher salaries and the increasing cost of electricity and public transport could cause additional pressure.
These factors were leading to higher prices, including the interest rate subsidies in the government’s economic stimulus package and a 17 percent increase in bank credit in the first half of 2009.
Last year, the soaring cost of fuel and building products pushed Vietnam’s full-year inflation rate to 22 percent.
Vietnam may face high inflation by 2nd half of 2009
The General Statistics Office has warned that high inflation could return in the second half of this year.
The increased price of petrol and lower interest rates were contributing to inflation. Lower interest rates usually stimulate spending, which increases prices.
Nguyen Minh Phong from Hanoi Socio-Economic Development Studies Institute said no assurance could be given that inflation would not climb to two-digit figures this year.
The National Assembly has revised down the full year inflation target to 7 percent, while the State Bank of Vietnam has estimated the inflation rate will be between 6 and 9 percent, the Ministry of Planning and Investment estimated 7 to 8 percent and the World Bank 8 percent.
