Inflation rate decreases, but worries have not been eased
VietNamNet Bridge – Believing that the slowdown in the consumer price index(CPI) in June reflects the stability of the national economy, foreigninstitutions have warned that the minus CPI increase in June could be thenegative signs for the production and consumption.
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| Source: JP Morgan Chase |
Foreign experts see both positive and negative things
JP Morgan Chase, in its latest report, commented that the inflation performancein Vietnam has become surprisingly positive. It stressed that the 6.9 percentCPI increase in the first half of 2012 in comparison with the same period of thelast year is a much more satisfactory result in comparison with the predictedrate of 7.1 percent.
According to JP Morgan, with the current economic performance, Vietnam wouldcontinue to see the inflation rate going down before it bottoms out in October.By that time, the CPI is expected to increase by 4.2 percent over the sameperiod of 2011, before it goes up slightly by the end of the year.
The inflation rate predicted for the whole year 2012 is 8.1 percent. And if thescenario comes true, the figure would be much lower than the 9.5 percent ratepredicted by the World Bank.
The inflation cooling down should be seen as a positive sign which would bringtwo big benefits to Vietnam. First, the low inflation rate would help stabilizethe macro economy, the payment balance, and give the opportunities to Vietnam toimprove the foreign currency reserves.
Second, the slow CPI increase would give favorable conditions for the governmentto loosen the monetary policy, thus helping push up the economic growth whichhas been slowing down recently (GDP growth rate was 4 percent in the firstquarter).
Meanwhile, Bloomberg has shown its worries about Vietnam’s economic growth.Quoting ANZ Bank, the newswire has reported that the CPI increase slowdown hasbeen attributed to the input material price decreases in the world market and tothe low domestic demand. Besides, the worries about the banks’ health may alsoaffect the investors’ confidence and Vietnam’s economic growth in 2012.
The China Post, while commenting that the low CPI increase is really the goodnews, has pointed out that the GDP growth rate of 4 percent is the lowest in thelast three years level.
The newspaper believes that the CPI increase slowdown has been caused by thetightening of the monetary policies and the weakened demand from Vietnam’sexport markets.
The move by the State Bank of Vietnam to slash key interest rates in recent dayshas been described by the newspaper as the policy response to the slow GDPgrowth.
People’s worries have not been lifted
The General Statistics Office (GSO) has announced that the CPI in June 2012decreased by 0.26 percent, for the first time in the last 38 months. If comparedwith the same period of 2011, the current price levels are higher by 6.9percent.
The government’s report submitted to the latest National Assembly’s sessionshowed that the GDP may grow by 4.31 percent in the first half of 2012. However,GSO is calculating GDP growth rate again, believing that the actual figure couldbe 4.4-4.6 percent.
However, the information about the low inflation rate has not made people happy.Nguyen Thi Mui, a housewife in HCM City said on Tuoi tre that while pressagencies report the low inflation rates, she still has to pay high for goods andservices.
“Everything is getting more and more expensive. I cannot find anythingdecreasing in prices as reported. Cabbage, for example, which was sold at 8000dong per kilo last month, has increased to 10,000 dong,” she said.
Thao, the owner of a rice shop at Ba Chieu Market, has affirmed that except somenew kinds of new rice products, the rice prices remain unchanged. However, NangHuong brand rice has increased by 1000 dong per kilo.
JP Morgan Chase, in its latest report, commented that the inflation performancein Vietnam has become surprisingly positive. It stressed that the 6.9 percentCPI increase in the first half of 2012 in comparison with the same period of thelast year is a much more satisfactory result in comparison with the predictedrate of 7.1 percent.
According to JP Morgan, with the current economic performance, Vietnam wouldcontinue to see the inflation rate going down before it bottoms out in October.By that time, the CPI is expected to increase by 4.2 percent over the sameperiod of 2011, before it goes up slightly by the end of the year.
The inflation rate predicted for the whole year 2012 is 8.1 percent. And if thescenario comes true, the figure would be much lower than the 9.5 percent ratepredicted by the World Bank.
The inflation cooling down should be seen as a positive sign which would bringtwo big benefits to Vietnam. First, the low inflation rate would help stabilizethe macro economy, the payment balance, and give the opportunities to Vietnam toimprove the foreign currency reserves.
Second, the slow CPI increase would give favorable conditions for the governmentto loosen the monetary policy, thus helping push up the economic growth whichhas been slowing down recently (GDP growth rate was 4 percent in the firstquarter).
Meanwhile, Bloomberg has shown its worries about Vietnam’s economic growth.Quoting ANZ Bank, the newswire has reported that the CPI increase slowdown hasbeen attributed to the input material price decreases in the world market and tothe low domestic demand. Besides, the worries about the banks’ health may alsoaffect the investors’ confidence and Vietnam’s economic growth in 2012.
The China Post, while commenting that the low CPI increase is really the goodnews, has pointed out that the GDP growth rate of 4 percent is the lowest in thelast three years level.
The newspaper believes that the CPI increase slowdown has been caused by thetightening of the monetary policies and the weakened demand from Vietnam’sexport markets.
The move by the State Bank of Vietnam to slash key interest rates in recent dayshas been described by the newspaper as the policy response to the slow GDPgrowth.
People’s worries have not been lifted
The General Statistics Office (GSO) has announced that the CPI in June 2012decreased by 0.26 percent, for the first time in the last 38 months. If comparedwith the same period of 2011, the current price levels are higher by 6.9percent.
The government’s report submitted to the latest National Assembly’s sessionshowed that the GDP may grow by 4.31 percent in the first half of 2012. However,GSO is calculating GDP growth rate again, believing that the actual figure couldbe 4.4-4.6 percent.
However, the information about the low inflation rate has not made people happy.Nguyen Thi Mui, a housewife in HCM City said on Tuoi tre that while pressagencies report the low inflation rates, she still has to pay high for goods andservices.
“Everything is getting more and more expensive. I cannot find anythingdecreasing in prices as reported. Cabbage, for example, which was sold at 8000dong per kilo last month, has increased to 10,000 dong,” she said.
Thao, the owner of a rice shop at Ba Chieu Market, has affirmed that except somenew kinds of new rice products, the rice prices remain unchanged. However, NangHuong brand rice has increased by 1000 dong per kilo.
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