Tag: inflation

Efficient credit allocation is central to controlling inflation and ensuring banking system safety.

Inflation management will represent a key task as 2025 unfolds.

The main causes are pressures from global energy and food price hike, and impact of Typhoon Yagi.

All possible levers are being discussed as Vietnam grapples with the specter of rising inflation in the opening months of the year.

As economic storms rage worldwide, Vietnam's Deputy PM Le Minh Khai marshals forces to monitor price swings and deploy flexible strategies to rein in inflation within the 4-4.5% target for 2024.

Most policymakers mistakenly believed inflation was only a momentary matter, central bank official tells Vietnam Economic Scenario Forum.

Lower inflation rate expected in 2023 due to cautious monetary policies and the risk of the global economy falling into recession.

Dialogue aimed at acknowledging the challenges facing enterprises and workers and seeking solutions to help overcome the difficulties in economic recovery.

Core inflation up from 4.5 per cent in October to 4.8 per cent in November.

After the State Bank of Vietnam (SBV) raised the ceiling interest rate for deposits under six months to 6 per cent per annum, many banks increased their rates from October 25. The highest is at SCB, at up to 9.3 per cent per annum. Analysts have forecast that interest rates will continue to increase over the closing months of the year due to exchange rate pressure and inflation.

The State Bank of Vietnam (SBV) believes that inflationary pressure is tending to increase. The 2022 figure is expected to exceed 4 per cent, posing challenges in control efforts next year. Cutting lending interest rates will also face difficulties, due to deposit rates and the USD/VND exchange rate both tending to increase.

The heat of inflation does not appear to be too significant in Vietnam, with the World Bank (WB) forecasting a rate of around 3.8 per cent for this year. However, factors such as fluctuations in energy prices, the end of policies supporting lower taxes, rising prices for public services, and higher wages will make controlling inflation more difficult.

Mr. Hiroshi Funaki, Chairman of Vietnam Holding Limited, said that despite the gloomy prospects for the global economy, Vietnam is considered an attractive investment destination with positive growth prospects. Several banks have recently raised their 2022 growth forecasts to nearly 7 per cent. Inflation, meanwhile, is predicted to reach 3.5-4.0 per cent for the year.

A survey conducted by the General Statistics Office (GSO) shows that many enterprises believe that production and business as well as orders will increase by the end of the year, even if global inflation increases. Notably, the non-State sector was the most optimistic, with 83.6 per cent of respondents anticipating better production and business conditions in the fourth quarter. The rate among foreign enterprises was 80.9 per cent.

Ms. Nguyen Thu Oanh, Director of the Department of Price Statistics at the General Statistics Office, said that despite pressure and difficulties in the global context, Vietnam’s CPI was under control in the first eight months of the year, at 2.58 per cent, which eases pressure on input costs. Underlying impacts, however, remain.

Food prices increased 2.3 per cent year-on-year in August; the highest rise since November 2020 and the fourth consecutive month of higher prices. Transport services increased 8.94 per cent year-on-year in the month; the lowest level since April. The Bao Viet Securities Company (BVSC) has forecast that annual inflation will come in at around 3.1-3.5 per cent.

The Ministry of Finance has forecast that CPI will increase 3.37-3.87 per cent in 2022; higher than the forecast of 3.4-3.7 per cent from the General Statistics Office. The State Bank of Vietnam, meanwhile, has put inflation in the range of 3.7 per cent, ± 0.3 per cent.

Inflationary pressure will persist until the end of the year and even into the beginning of 2023, analysts believe. The main cause is cost-push, with monetary factors a secondary cause. Minimizing the negative impact of rising raw material, gasoline, and food prices will determine the effectiveness of inflation management.

The existing inflationary pressure in Vietnam is due to cost-push factors, mainly energy prices, analysts have said. With oil prices now heading downwards and standing at their lowest level for six months, Vietnam will be able to control inflation at less than 4 per cent for the year. Inflation in the first seven months was just 3.1 per cent, which is low compared to many other economies around the world.

According to the Ministry of Finance, ten out of eleven groups of main consumer goods and services saw prices increase July and this will maintain pressure on inflation control over the remainder of the year. Some factors, however, ease that pressure, such as the supply of consumer goods being abundant along with ongoing and planned fiscal policies.