Vietnam raised this year's inflation goal to 8 percent amid signs it will miss the current forecast of 7 percent as strengthening economic growth pushes up prices.
The Southeast Asian nation's inflation expectations need to be "consistent" with its 2010 economic growth target of 6.5 percent, according to a statement on the government's website Monday.
The consumer price index rose 9.46 percent in March from a year earlier, the fastest pace in a year, before gains eased to 9.23 percent last month. The government increased electricity prices by an average of 6.8 percent in March, and in February state-run Vietnam National Petroleum Corp., which supplies 70 percent of Vietnam's fuel, raised gasoline prices by 3.6 percent.
The government "would be very successful" if it manages to keep inflation under 10 percent this year, Saigon Securities Joint-Stock Co., Vietnam's second-largest brokerage, said in March. A goal of 7 percent inflation is "impossible," the securities firm said.
In order to meet the full-year growth forecast, Vietnam needs to target 7 percent economic growth in the second half, Prime Minister Nguyen Tan Dung said at a ministerial meeting last week. The country will also limit the budget deficit at 6 percent of gross domestic product this year, according to the statement.
The government will try to keep the economy stable this year and prevent the inflation rate from accelerating to a very high level, Dung said last week.
The government asked the State Bank of Vietnam to lower deposit rates to 10 percent, borrowing rates to 12 percent and to keep the dong's exchange rate at a "reasonable level," according to today's statement.
The central bank also needs to improve liquidity in the banking system and increase the amount of outstanding loans in the economy, the statement said.