Double-digit inflation not likely in 2010: official

TN News

Email Print

There should be no major concern about consumer prices as it is unlikely that inflation will reach double digits this year, says an official of the national financial advisory body.

Inflation would be around 8-9 percent this year or somewhere near the government's target of 7 percent, said Le Duc Thuy, Chairman of the National Financial Supervisory Committee.

Consumer prices rose 8.46 percent in February from a year earlier after gaining 7.62 percent in January, according to figures from the General Statistics Office in Hanoi.

In the first two months alone, inflation increased 3.35 percent and the Ministry of Finance said the hike was on par with the corresponding figures from 2003 to 2007.

"The increase in the first two months will account for 40-50 percent of the annual increase this year," Thuy said at a government meeting in Hanoi Wednesday.

"We need to be vigilant, but there's no need to worry too much about consumer prices in the first two months of 2010," he said.

Inflationary pressures tend to ease after the Tet Lunar New Year holiday, which this year fell in February. But Thuy said consumer prices could increase more than usual this March due to hikes in fuel and power prices and the recent dong devaluation of more than 3 percent.

Still, inflation in the first quarter of the year would only be around 4 percent, he said.

The government plans to keep both money supply and credit growth this year at around 25 percent.

Thuy said the target can be achieved easily and the government should not try too hard to tighten monetary policies.

Loans need to be regulated but if credit is controlled more than it should be, businesses will face difficulties, he warned.

More Business News