Vietnam inflation may be 8-9% this year, Bao Viet forecasts

TN News

Email Print

Vietnam's inflation may reach 9 percent this year, less than some analysts estimate, as sufficient supplies cap gains in food prices, Bao Viet Securities Co. said.

"We are still rather optimistic, compared with other economists who think inflation may exceed 10 percent and reach as high as 14 percent," Tran Hai Yen, an analyst at Bao Viet Securities, said in a discussion with investors in Hanoi Monday.

Bao Viet's forecast for inflation of between 8 percent and 9 percent at the end of 2010 will exceed the government's 7 percent target, and the central bank may raise its benchmark interest rate to as high as 10 percent by year's end, Yen said. Still, the increase in borrowing costs will be "gradual," the analyst said.

The central bank has kept its benchmark interest rate at 8 percent since raising it by 1 percentage point in December. Vietnam's inflation reached a 10-month high of 8.46 percent in February. The government expects the economy to expand 6.5 percent this year from 5.3 percent in 2009.

Food makes up about 40 percent of the consumer price index, and there probably won't be any surge in food costs this year because of sufficient supply, Yen said. Consumer prices in March will climb by less than 0.5 percent from the previous month, she said.

More Business News