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Vietnam Today

Inflation down sharply in Q2

Released at: 21:08, 11/07/2017

Inflation down sharply in Q2

Photo: Ngoc Lan

Figure down in April, May and June, running counter to trend since 2015.

by Ngoc Lan

Inflation fell sharply in the second quarter of 2017, in contrast with the ongoing trend since the end of 2015, the Vietnam Center for Economic and Policy Research (VEPR) wrote in a report released on July 10.

The consumer price index (CPI) was 4.3 per cent, 3.19 per cent, and 2.54 per cent year-on-year, respectively, in April, May, and June, according to VEPR’s report. The CPI for different commodities has changed inconsistently, with the price of foodstuffs falling while those for public goods and services continuing to increase.

The State Bank of Vietnam (SBV), meanwhile, is carefully regulating money supply, which has kept inflation falling continuously since the beginning of this year to 1.29 per cent year-on-year at the end of the second quarter.

VEPR Director Mr. Nguyen Duc Thanh told a workshop releasing the Vietnam Macroeconomic Policies report on July 10 that with prudent monetary policy as well as the impact of food price shocks, inflation in 2017 will remain low, at under 2.5 per cent.

The report also noted that Vietnam’s economy in the second quarter recovered considerably, growing 6.17 per cent year-on-year thanks to substantial improvements in the agriculture and service sectors.

Additionally, the industry and construction sector (except mining) saw significant growth, equal to the figure in the second quarter of 2016.

Both export and import growth reached their highest levels for more than five years, of 24.5 per cent and 26.8 per cent year-on-year, respectively.

Thriving exports improved the country’s trade balance. Worth noting is that, for the first time, Vietnam’s trade deficit with South Korea exceeded that with China, at $15.9 billion compared to $14.1 billion.

VEPR also forecast that growth in the next two quarters will reach 6.7 and 7 per cent, bringing the annual figure to 6.4 per cent, up 0.3 percentage points compared with VEPR’s report in the first quarter.

Mr. Thanh also affirmed that the government needs to seriously implement policies on government staffing cuts and reduce recurrent expenditure and must provide financial support to the budget-funded activities of various associations.

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