June CPI likely stubbornly high on rising food prices: economist

The prices of meat, vegetable, egg in Ho Chi Minh city rose sharply in recent days pressuring the Consumer Price Index (CPI) in June as food accounted 40% weight in CPI calculation

The prices of meat, vegetable, egg in Ho Chi Minh city rose sharply in recent days pressuring the Consumer Price Index (CPI) in June as food accounted 40% weight in CPI calculation, the online newspaper Saigontimes reported on June 15.

Higher price level mainly comes from a shortage of supply due to unfavorable climate conditions and epidemic diseases. In the market in Ho Chi Minh City, the prices of vegetable have doubled from the previous week while the eggs and meat were sold at 10-15% higher.

Higher food prices will affect June CPI significantly. June CPI is estimated to rise by around 2.5% from May, Nguyen Minh Phong, Head of the Socio-Economic Research Division under the Hanoi Socio-Economic Research Institute predicted.

The above prediction is much higher than earlier forecast of the Price Management Department under the Ministry of Finance of between 0.7%-0.8%.

HSBC also concerns on pressure of higher food prices as saying about Vietnam inflation on the latest report on Vietnam on June 7. HSBC said that inflation remains the country’s greatest challenge, as the CPI is expected to top 20% year-on-year in June.

HSBC revised its inflation forecast for Vietnam to 16.7% instead of 14.3% in 2011, and 9.7% instead of 8.9% in 2012.

Earlier, World Bank forecast Vietnam inflation will peak in June and slow down to 15% for the rest months.

Tags: Vietnam CPI, Vietnam CPI 2011, Vietnam economic, Vietnam economy