Inflation to rise by 2 pct in May

Inflation is expected to increase by only 2 percent in May compared to last month’s hike of almost 4 percent.
April's consumer price index (CPI) rose by 3.32 percent compared to March, the highest rate of increase since May 2008.
This increase pushed the nation's inflation in the first four months of this year to 9.64 percent, already exceeding the figure expected for the entire year.
Former State Bank of Vietnam Governor Cao Sy Kiem said inflation would continue to be high in the near future because of domestic policies such as deregulation of electricity rates, which is expected to take effect in June, and a minimum wage increase.
The current bout of high inflation was started when the Vietnam dong was devalued by 9.3 percent against the US dollar in February, and worsened by the hikes in petrol costs and electricity rates in March.
Inflation has also been spreading globally, especially in Asia, putting great pressure on the Vietnamese economy.
To help curb rising prices, the Ministry of Industry and Trade has promised to maintain the prices of food staples.
General Secretary of the Vietnam Banking Association Duong Thu Huong and member of the National Advisory Council for Financial and Monetary Policies Tran Hoang Ngan however cautioned that the government should tighten monetary policies in a consistent manner to avoid reigniting pressures that could result in a double-digit inflation at the end of this year.
"If the government is determined to pursue tighter monetary policies between now and the third quarter, inflation could begin to ease by the end of the third quarter or early in the fourth quarter," said Fulbright Economics Teaching Program's Director Vu Thanh Tu Anh.
The Asian Development Bank (ADB) and the British bank Barclays however have a gloomier view of the Vietnamese economy.
ADB forecast Vietnam's inflation could top 13 percent by this year's end while Barclays expected inflation to approach 15 percent.

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