HSBC Predicts Vietnam’s Inflation to Be Capped Under 4%

9:56:56 AM | 5/16/2022

The HSBC has forecast that Vietnam's inflation will increase 3.7 percent, still below the inflation ceiling of 4 percent set by the State Bank of Vietnam (SBV).

HSBC predicts Vietnam’s inflation to be capped under 4 percent (Photo: VNA)

In its "Vietnam at a glance" report in May, HSBC Vietnam said that inflation pressure in Vietnam remains low in the ASEAN region.

According to the HSBC, in April, headline inflation rose by only 0.2 percent month-on-month, leading to a modest increase of 2.6 percent year-on-year, still within the market's expectations. The main cause of this is the low transport costs, partly thanks to the drop in world oil prices in the month and the reduction of tax on environmental protection of Vietnam.

The report also said that Vietnam is benefiting from the reopening strategy. With the official reopening of its border on March 15, Vietnam welcomed over 100,000 foreign tourists in April, a threefold increase compared to that of March.

For domestic tourism, people's travel needs have exceeded the pre-pandemic level since the beginning of April, which has contributed to the recovery of the retail industry, helping it grow by 5 .8 percent in April.

Goods sales increased by 2 percent month-on-month, and spending on services and the travel-related segments also rose by 7 percent month-on-month, signaling a good start for the recovery in the service sector.