IMF forecasts Vietnam’s inflation at 18.8 pct in 2011

The International Monetary Fund (IMF) in its latest World Economic Outlook on Wednesday forecast the consumer price index (CPI) in Vietnam in 2011 to be around 18.8% and 12.2% in 2012.
This figure is higher than the data reported in June by IMF, which was 13.75% and 6.25% respectively.

Vietnam’s CPI in August increased 23.02% year-on-year and 15.68% compared to the end of December 2010. Credit Suisse had not previously given a specific prediction but said that Vietnam’s inflation might have peaked in August.

IMF warned Asian countries, including Vietnam to pay special attention to controlling rampant inflation. Despite the increased interest rate policy, the actual costs of capital (real interest rate) in these countries remain at a record low due to inflationary pressures.

In its report, IMF also cut its forecasts on gross domestic product (GDP) growth of Vietnam in 2011 to 5.8% and in 2012 to 6.3%, compared with its forecasts made in June at 6.25% and 6.8% respectively.

Unemployment rate is expected to remain at 5% for the 2011-2012 period. The current account deficit in 2011 is forecasted at about 4.7%, and will decrease to 3.8% in 2012, according to IMF.

Explaining the adjustments in this report, the IMF said that tight monetary policy and decrease in foreign consumer demand will slow down the growth of emerging economies as well as developing countries in short-term.

In the IMF report, GDP growth of emerging economies in the second half of 2011 is forecast to around 6.25%-7% and 6% in 2012.

Today, IMF also cut the forecast on global economic growth down to 4% in the 2011 – 2012 period on the risk of recession, debt crisis being worsened in Europe. – Vietbiz24

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