Vietnam is unlikely to keep inflation under 7 percent this year as the recent dong devaluation and energy hikes will drive consumer prices up, economists say.
Le Xuan Nghia, a senior advisor to the government, said the currency devaluation will add 1.1 percent to the country's consumer price index while higher power and petrol prices will drive inflation up 0.71 percent and 0.54 percent respectively.
Inflation may reach 9 percent at the end of the year, Nghia said.
Vietnam raised gasoline and diesel prices by up to 24 percent last week and power prices increased by 15.3 percent on March 1. The central bank devalued the dong by 9.3 percent against the dollar on February 11.
Inflation accelerated to a two-year high of 12.31 percent in February. Le Dinh An, director of the National Center for Socio-Economic Information and Forecasting, said normally inflation will ease to only 0.1-0.5 percent in March the month after the Tet holiday. But this year, March's inflation will be at least 1.5 percent, he said.
"The goal to keep inflation under 7 percent this year is impossible to reach," he said.