Inflation in Vietnam likely to be below 3 pct this year

Inflation this year is likely to be 2.5-3 percent, well below the target of 4 percent set by the National Assembly, due to low consumer demand, analysts said.

Global prices of strategic materials are likely to climb in the next few months due to geopolitical tensions and Covid-19, but food and foodstuff prices in Vietnam are expected to remain stable due to strong supply and weak demand, the Ministry of Finance’s price management department said at a seminar on the price and market situation on Friday.

The consumer price index (CPI) was up 1.47 percent year-on-year in the first half of the year, its slowest rise since 2016, according to the General Statistics Office.

The prices of some foodstuffs like pork and chicken fell, while those of petrol and commodities rose sharply.

Nguyen Ba Minh, head of the Institute of Economics and Finance, said the CPI would rise by some 2.5 percent this year.

Le Quoc Phuong, former deputy director of the Vietnam Trade and Industry Information Center, too expected inflation to be below 3 percent.

Dinh Trong Thinh, an economist at the institute, said if the Covid-19 situation worsens, and Vietnam’s economy grows at 6.8-7 percent in the second half of this year, inflation would be 3.3-3.5 percent.

If the economy grows at 7-7.4 percent, the inflation would be 3.8-4 percent, he said.

The government expects growth of 6-6.5 percent in the second half this year depending on the Covid situation.