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||28 March 2010
UK bank warns Vietnam of ‘worryingly high’ inflation
Vietnam’s inflation has reached “worryingly high” levels, HSBC Holdings Plc said, as the Southeast Asian nation joins others in the region that are seeing resurgent price pressures amid an economic recovery, Bloomberg News reported.
Consumer prices climbed 9.46 percent in March, the biggest gain in a year, up from 8.46 percent in February, the government statistics office said yesterday. Vietnamese inflation has accelerated for seven months, adding to pressure on the central bank to raise interest rates.
Benchmark inflation indexes in India and China hit 16-month highs in February and prices may rise “abruptly” in Thailand in April, according to Citigroup Inc. In Vietnam, seasonally adjusted figures suggest that month-on-month inflation accelerated, HSBC said.
“The latest number is still worryingly high,” Wellian Wiranto, a Singapore-based economist for HSBC, said in research published after the figures were released. “Inflationary pressures will continue to be strong in the coming months.”
The State Bank of Vietnam has held its benchmark interest rate at a one-year high of 8 percent since December. Fitch Ratings this month said the country needed “strong policy tightening,” as it put Vietnam’s debt rating on negative watch.
Inflation was driven by processed food and housing-related Expenditures, amid “buzzing construction activities,” Wiranto wrote.
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