Vietnam CPI rises at fastest pace in two years

Vietnam’s consumer-price index rose at its fastest pace in two years in February, gaining 12% from the same month a year earlier, the government said Wednesday.

The CPI data comes after State Bank of Vietnam Governor Nguyen Van Giau on Monday said the prime minister will this week announce a series of measures aimed at curbing inflation.

Inflation is raising concerns among emerging economies, and Vietnam is one of the main trouble spots. Years of loose interest rate policies and state-subsidized lending have ramped up its economic growth, but analysts say the country is ill-equipped to handle it.

The rise stemmed mainly from higher prices for education services, food and foodstuffs, and housing and building materials, the General Statistics Office said in a statement.

From a month earlier, the February index rose 2.1%, the fastest on-month rise since June 2008. The figures are based on the first 23 days of the month.

In January, the index rose 12.17% on year, and was up 1.74% from the previous month.

The government is aiming to cap inflation at 7% for the whole of this year.

“This target is looking hard to reach now, with the price of electricity to be raised by more than 15% from March,” a Hanoi-based trader said, adding that prices of oil products and coal are also expected to rise in the near term.

Local media also cited Mr. Giau as saying that the premier has agreed to trim this year’s credit growth target to below 20% from 23%, as well as to limit the budget deficit to 5% of gross domestic product and cut the government’s regular expenditure by 10% this year – WSJ

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