Vietnam forecasts June CPI up 7.8% yr/yr

Vietnam forecast on Monday that annual consumer price inflation in June would rise to 7.8% on higher fuel and food costs, up from 7.31% in May.

The rise in the consumer price index (CPI) is above a government target to keep annual inflation this year at less than 7%.

The General Statistics Office released preliminary inflation figures showing food prices this month would be 14.86% higher than last June, above a rise of 14.6% in May from a year earlier.

The government report also estimated consumer prices this month would edge up 0.85% from
May, following higher fuel prices, higher transport cost as well as construction cost.

Food prices account for 42.8% of the price basket Vietnam uses to calculate inflation. Vietnam's inflation data is not seasonally adjusted.

The Finance Ministry expects to control Vietnam's 2007 inflation at less than 7%, in line with a government goal of keeping the rate below the annual economic growth target of 8.5%.

But it has not revised its target since a fuel price rise early last month, which has a chain effect on production of items essential for industry and thus overall economic growth such as coal, cement, steel and electricity.

Consumer prices over the last six months have risen an estimated 5.2% since December, the statistics office said.

The World Bank has forecast that Vietnam's consumer prices this year would be 6.5% higher than 2006 while the International Monetary Fund estimated a year-end inflation rate of 7.1%.

Source: Reuters