Although inflation was kept to a 6.6% increase in 2006 from the previous year, there will be external pressures at play that will fuel a rise in the Consumer Price Index (CPI) this year to between 7 - 7.5%, the deputy director of the Institute of Prices Analysis said.
Beside the expected increase of oil prices, pressure on domestic energy market will come from the planned reduction of government subsidies on electricity, coal, petrol and oil. The Government has already approved an electricity price increase, and the Viet Nam National Coal and Mineral Industries Group (Vinacomin) has suggested a 20 per cent increase in coal prices for its four largest industrial end users of electricity, cement, fertiliser and paper from January 2007.
However, some experts think that the CPI this year will see an increase lower than that of 2006, and will hover at around 6% for 2007. This opinion is supported by the arguments, that with Viet Nam’s inclusion into the World Trade Organisation, imported goods duties will decrease, which would lead to a decline of imported goods prices.
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