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Inflation in Vietnam

inflationinvietnam Inflation in VietnamInflation in Vietnam (Vietnam CPI) monthly data source: General Statistics Office of Vietnam

Inflation in Vietnam has been a serious issue in the past, but has recently declined. In 2008, at >28%, it was running substantially higher elsewhere in frontier and emerging markets. This was again the case in 2011, when inflation climbed to >23%. Both of the episodes originated with external shocks but were exacerbated by loose macroeconomic policies (a pro-growth policy stance, resulting in easy money and excessive fiscal stimulus).

Inflation in Vietnam data (Source:ADB)

Inflation in Vietnam data (Source:Government, Gso, Central bank)

Data: YoY CPI growth (%)

mm/yyyy200520062007200820092010201120122013
19.78.87.1914.117.57.6212.217.37.07
29.18.46.515.714.88.4612.3 16.47.02
38.47.76.819.411.39.4613.9 14.16.64
48.57.37.1621.49.239.2317.510.5
58.17.57.3125.25.589.0519.88.34
67.67.67.826.83.948.6920.8 6.9
77.57.58.39273.318.1922.2 5.35
87.37.58.5728.31.978.1823 5.04
97.86.98.827.92.428.9222.4 6.48
108.36.79.3426.72.999.6621.6 7.0
118.56.91024.24.3511.119.8 7.08
128.46.612.619.96.5211.818.16.81

Vietnam Inflation commentary update:

2013.01: Key points from Vinacapital:

  • Inflation was kept at single digit in 2012 for 2 reasons: 

A tight monetary policy as mentioned earlier.

A lack of effective demand due to the slowdown in GDP growth

  • Prospect for 2013:

Recognizing that its over-tight monetary policy has hampered economic growth, the SBV has begun to relax. These steps may generate inflationary pressures. However, they are countered by an anaemic rate of GDP growth. Thus there will be no noticeable demand-pull forces on the CPI.

We project inflation to be 7.0% – 7.5% YOY at end 2013.

2012.03: The March CPI release coming as it did even lower than the latest predictions was well received. The 0.15% m/m increase was the lowest in two years and brings the y/y CPI down to 14.15%

2012.02: February CPI rose only 1.37% m/m; up 16.44% y/y and 2.38% YTD. Although the m/m inflation trend was slightly faster than January’s m/m CPI of 1% due to the seasonal factors. Indeed, we think this marks a modest increase in the consumer price index compared to previous years and we are likely to have the second least inflationary Tet season since FY2007.

2012.01: Vietnam Inflation slowed for a fifth month in January. It climbed 17.27% from a year earlier, compared with an 18.13% pace reported for December. That will give the Vietnam central bank more confidence to cut rates.

This page updates Inflation in Vietnam data and commentary month by month.

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