Vietnam CPI likely + 9% at end-2010: Trade Ministry

Vietnam’s consumer price index is likely to rise around 9% this year, from 7.58% at end-October, as a result of strong increases in prices of various essential goods amid soaring demand, the Ministry of Industry and Trade forecast.

The ministry’s Domestic Market Management Department said the index for November will remain high if no more drastic measures are made. The country’s CPI went up 1.05% last month.

The index is unable to reach two digits, the department added.

Deputy Minister of Planning and Investment Cao Viet Sinh was quoted by the Vietnam Investment Review as saying that steps so far to control the CPI were showing a little effect.

“The CPI trend is now at a warning level,” he said. “Actually, it is signaling a further sharp rise in months to the Lunar New Year festival if we do not use strong measures.”

Vu Dinh Anh, deputy director of the Institute for Market and Pricing under the Ministry of Finance, believed that keeping the price rise down to single digits will represent a success for the government.

As usual, the CPI will increase more than 1% on average in the last two months of a year, Anh noted.

Economist Tran Du Lich, a member of the National Financial and Monetary Policy Advisory Council, shared the same view with Anh, saying that high consumer prices may spoil the government’s plan to bring down interest rates.

Low real interest rates will be unattractive to individual and corporate depositors and encourage them to turn into U.S. dollar and gold investments, Lich said.

Tags: Vietnam CPI, Vietnam CPI 2010, Vietnam economic, Vietnam economy