"Inflation rose slightly in Vietnam, from 7 per cent over the same period of last year, to 7.08 per cent in November. Monthly inflation fell from 0.85 per cent to 0.47 per cent but quarterly inflation maintained strong growth,” said Vincent Conti, Asian economic expert for the Asia - Pacific Economic Update Report released by ANZ Bank.
The report predicted that Vietnam's inflation would reach 7.5 - 8.5 per cent this year mainly because of repeated rises in medical services and health care.
According to the report, in October, stable food prices held inflation of this group down 1.42 per cent from a year earlier, the lowest level since October 2003. Food prices typically rise ahead of the Lunar New Year, or Tet. However, the most stable increase in food prices in the past decade, coupled with price-controlling efforts of the government, can help alleviate these pressures this year.
However, inflation driven by medicines and medical services is the highest level in the consumer goods bracket, representing an increase of 45.4 per cent against the same period of last year and 38.5 per cent against October. This data was also affected by repeated rise in health services, up 63.7 per cent against a year earlier, or 6.66 per cent a month.
The State Bank of Vietnam (SBV), or the central bank, is holding the policy interest rate of 10 per cent. Although the SBV has not made a decision on new policies, the government expressed its expectation of lower interest rates in 2013.
Thus, according to the report, the central bank may lower the base rate by 1 per cent in the fourth quarter or early 2013. However, the report estimated that inflation will reach double-digit growth in the second half of 2013 due to prices of medical services, health care and basic effects, which may cause the State Bank to consider monetary tightening from the middle of next year.
Q.C
Vietnamese
