Vietnam March CPI seen up 0.5-0.6 pct

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Vietnam's consumer price index this month is forecast to rise between 0.5-0.6 percent from February and annual inflation would be kept in check, Finance Minister Vu Van Ninh said on Friday.

The forecast was based on initial data from Hanoi where prices were seen rising 0.3-0.4 percent from last month while inflation in Ho Chi Minh City would be lower, Ninh told a televised meeting of the National Assembly Standing Committee.

Economists and some officials say the government's target to keep the consumer price index growth (CPI) this year at 7 percent is looking increasingly hard to achieve, partly due to recent price hikes of fuel and electricity.

But Ninh said Vietnam has enough instruments to keep annual inflation within its target.

Vietnam's top oil product importer and distributor Petrolimex raised retail petrol prices on Feb. 21 by 3.6 percent. On March 3 it cut diesel, fuel oil and kerosene by around 2 percent.

Ninh said the rise in petrol prices last month was offset by lower lower prices of diesel.

Giang Trung Kien, chief analyst at Hanoi-based FPT Securities, said Ninh's forecast was below market expectation of a rise of more than 1 percent.

Vietnam's stock markets closed shortly after Ninh's forecast, with the main exchange ending down 0.72 percent and the smaller market in Hanoi losing 0.43 percent at close.

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