World Bank forecasts Vietnam inflation at 9 pct in 2010

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The World Bank forecasts Vietnam's inflation at 9 percent this year, lower than estimates by Citigroup Inc. and Credit Agricole CIB as food prices ease.

The National Assembly's inflation target of 7 percent is "perhaps too tight for the current situation," Martin Rama, the bank's lead economist in the Southeast Asian nation, said at a briefing in Hanoi Thursday. "But if things continue the way they go, Vietnam should have single-digit inflation."

Last month, Vietnam's government raised its inflation target for 2010 to 8 percent on concerns economic growth will push up prices. The nation is aiming for a gross domestic product growth rate of 6.5 percent this year, higher than the 5.3 percent expansion in 2009.

Vietnam's consumer prices will rise more than 10 percent in 2010, Credit Agricole said in a May 25 report. Citigroup said in April that Vietnam's inflation will probably reach almost 11 percent this year.

The inflation rate fell for a second month in May to 9.05 percent from 9.23 percent in April, because of slower growth in food prices, according to figures from the General Statistics Office in Hanoi.

"There is one price that is very decisive for the consumer price index, that's the price of rice," Rama said. "Rice has been more or less on a declining trend, and when rice is cheap in Vietnam, all food items become cheap."

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