Vietnam's retail sales grew at their slowest pace in May as consumers cut back on spending amid rising inflation.
Despite the long holiday at the beginning of the month, retail sales only reached VND156 trillion in May, up 0.68 percent from April.
This represented the smallest monthly increase in 2011, Vietnam News Agency reported, citing domestic market officials at the Ministry of Industry and Trade.
Between January and May, retail sales reached VND762.7 trillion, up 22.5 percent from the same period last year. Discounting inflation and higher consumer prices, the increase only amounted to a 6.4 percent rise in spending.
Market offcials said high inflation has forced many consumer to tighten their belts.
Even though inflationary pressures have begun to ease, the situation is still complicated due to high interest rates and expanding trade deficit, they said.
Vietnam's consumer price index was up 19.78 percent in May compared to 2010, the General Statistics Office said Tuesday. The jump represented the biggest jump since December 2008.
Vietnam has been considered a star due to its fast-growing consumer market. Total retail sales for both commodities and services surged by 24.5 percent in 2010.
This year, however, market prospects have been dampened by soaring inflation.
In a March report, FTA Research & Consultant said consumers in major Vietnamese cities were following inflationary trends closely. Many respondents reported that if inflation persists, they will have to cut down spending on traveling, clothing, beauty care, home appliances and entertainment.
Spending on necessities like education, transportation, food and beverage, electricity, water and healthcare are unlikely to fall, the firm predicted.