The Ministry of Investment and Planning will propose a revision to the current annual inflation target of 15 percent after prices surged 13.29 percent in the first half of the year, Minister Nguyen Hong Phuc said.
"The 15 percent target was set based on optimistic forecasting, when prices started falling and world market prospects improved," he said in an interview published Sunday on news website VnExpress.
"But now things have changed. According to research agencies of the ministry, prices will continue to rise until September, before slightly easing for some time and surging again in the final months of the year," Phuc said.
Phuc said even a target of controlling inflation at 17-18 percent is not an easy one to meet. Although it's quite high, it is still better than last year's 22 percent, he said.
Vietnam's government in early June made its second revision to inflation and growth forecasts in less than a month. The original target was set at only 7 percent at the end of 2010. The current economic growth target is 6 percent, down from a December estimate of 7-7.5 percent.
"The number one goal is to control inflation, but economic growth needs to be secured at a reasonable level," he said, adding that a 6 percent expansion can help restore economic stability and create jobs for the poor.
To have a strong enough economic growth, Vietnam has to "accept inflation at a certain level," Phuc said.
The minister said high interest rates and trade deficits are other difficulties that the economy has to face in the second half of the year.
Vietnam's trade deficit hit $7.5 billion in the first six months, equal to 18 percent of the country's exports. The government aims to keep the annual trade deficit below 16 percent of exports in 2011.
"I think tightened monetary policies need to be sustained through the end of this year, even to next year," he said. Both government officials and researchers have agreed that it's time the country switched its focus on growth to stability, Phuc added.