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Vietnam inflation quickens for first time in 6 mths
Annual inflation in Vietnam accelerated this month for the first time since March, propelled by an increase in school fees and food costs.
The consumer price index rose 8.92 percent in September from a year earlier - the biggest annual rise in seven months - and 1.31 percent from August, government data showed.
The increase ended the cooling trend of the past half year, but economists chalked it up to mostly to one-off factors.
Education costs leapt 15.56 percent in September from the same month last year and 12 percent from August, the data showed. Increases in tuition and fees were behind the rise.
Dragon Capital, a Vietnam-focused fund management company, said education accounted for 0.7 percent, or more than half, of the monthly figure.
"A spike is often seen from this factor in September as children head back to school, though it is usually lower - since 2005, average inflation for the month has been 0.5 percent," it said in a report ahead of the data.
In addition to education, the central bank's August currency devaluation of 2 percent and the mid-Autumn festival were also contributors, said Matt Hildebrandt, who follows the Vietnamese economy for JP Morgan in Singapore.
He expected monthly increases in inflation to be larger than the "subdued" numbers leading up to September.
"We do caution that there is concern that seasonal flooding later this year and the usual end-of-year holiday demand could put upward pressure on food prices in coming months," he wrote.
Vu Dinh Anh, Deputy Director of the Finance Ministry's Price and Market Research Institute, said the monthly increase of 1.31 percent was the highest September reading since 1995, adding that higher rice prices had been an important factor.
Food related items have the highest weighting in Vietnam's inflation basket of about 40 percent.
Export floor prices for rice were increased in August and again in September, leading to higher domestic prices in the Mekong Delta, where most of Vietnam's rice is grown.
"It is uncertain whether the CPI will rise at a fast pace in the last three months, as it depends on reaction of the market to this news, and the credit growth rate that the central bank will release at the end of this month," Anh said.
"If credit rises at a faster pace than expected, the inflationary pressures may remain high in the last quarter."
The authorities have been trying to coax commercial banks to lower lending rates, but several factors have been conspiring against the effort and rates remain in the 11-15.5 percent range, according to the State Bank of Vietnam.
tuoitrenews, Reuters
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