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Vietnam inflation to be 10.5% next year: UK bank
Vietnam’s inflation rate will be 10.5 percent in 2011 Edward Lee, Standard Chartered Bank’s head of FX strategic research department in Asia, has forecast.
But the country will be the third fastest growing economy in Asia, with growth topping 7.2 percent, behind China and India.
Along with Indonesia and India, Vietnam will also be one of only three countries to achieve higher growth in 2011 than 2010.
The growth will be spearheaded by the strong development of domestic consumption and exports, which in the first nine months this year increased 25.4 percent and 32.2 percent year on year, according to the General Statistic Office of Vietnam.
The British bank also expected, following the Party Congress to be held in January 2011, the government to come up with new policies to boost the economy and improve living standards.
This will also help the country attract more foreign investment.
The official dong-dollar exchange rate will exceed VND20,000 next year.
Since March 2008 the dong has lost 23.3 percent against the greenback. This year alone the State Bank of Vietnam devalued the dong three times, with the latest depreciation of 2.1 percent coming in August.
Standard Chartered said the office rate is likely to reach VND20,800 to a dollar by the end of 2011. In recent years the dong has fallen 9.27 percent in 2008, 5.7 percent in 2009, and 5.51 percent so far this year.
But the devaluation of the dong will bring pressure on prices. Besides, with a high growth rate targeted, curbing inflation will be very difficult.
The high inflation rate could force the central bank to tighten monetary policy, making it difficult to reduce the interest rate to 12 percent a year as hoped.
Thoai Tran
tuoitrenews
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