ASEAN KEY DESTINATIONS
Vietnamese inflation hits three-year high
The General Statistics Office said that the June consumer price index would be 20.82 percent higher than a year earlier. In May, the index was 19.78 percent higher than the year-earlier period.
Consumer prices this month will be 1.09 percent higher than May, slowing from a monthly increase of 2.21 percent between April and last month, GSO said. The monthly increase was in line with market expectations.
In November 2008, consumer prices were 24.22 percent higher than a year earlier, government data show. Vietnam has sharply raised interest rates this year in a bid to combat high inflation.
Earlier this month, the Asian Development Bank said it saw room left for policy rate increases, adding it expected monthly inflation to start to come down this month and double-digit annual inflation to ease in August.
Food prices soared 28.02 percent this month from June 2010, accelerating from an annual rise of 26.54 percent last month and 9.34 percent between June 2009 and June 2010.
Le Dang Doanh, an economist, said the monthly slowing in June resulted from the tight monetary policy while overall, inflation remained high and Vietnam should not loosen its stance.
“The purchasing power of ordinary people is exhausted,” Doanh said. “They are no longer able to afford anything else except daily needs, school fees and health care.”
Doanh said the state should make “serious” changes such as reducing public spending, reforming state-owned firms and having budget transparency.
Vietnam has cut its growth target this year to 6.5 percent, saying that fighting inflation takes precedence over growth. Earlier, the official GDP growth target was up to 7.5 percent.
It has also set initial growth targets for next year at 6.5 percent and said the monetary policy would continue to be tight.
By the end of May, it had cut 80.55 trillion dong ($3.9 billion) of public investment, or 9 percent of the total development investment planned for 2011, a newspaper quoted the Planning and Investment Ministry as saying.
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