Vietnam Economy: Quick View - Inflation Picks up Again

Abstract: Nevertheless, month-on-month data from the GSO suggest that the rate of inflation could pick up

again in the final three months of 2012. Monthly inflation was negative in June and July, but rose by 0.7% in

August and by 2.2% in September. Rapid rises in this measure in the next few months would represent an early

warning sign that monetary policy in Vietnam has again tilted too strongly towards supporting economic growth.

Full Text: Vietnam economy: Quick View - Inflation picks up again Event Consumer price inflation rose by 6.5%

year on year in September, according to estimates published by the General Statistics Office (GSO) on

September 24th. Analysis The rate of inflation quickened to 6.5% in September, from 5% in August, marking the

first acceleration in Vietnam's headline inflation since July 2011. Nevertheless, after slowing steadily for 12

consecutive months, inflation remains far below the average of 18.7% recorded last year, when prices surged

owing to high global commodity prices and the easy availability of credit. Price increases have averaged 10% in

2012 so far. Within the annual data, prices rose in all major categories. However, the increases were significant

in only a few categories, especially medicine and healthcare (up by 17%) and education (11%). Food prices,

which have the largest weighting in the index, rose by just 0.1%. Nevertheless, month-on-month data from the

GSO suggest that the rate of inflation could pick up again in the final three