Vietnamese CPI up 8.6 percent in August vs year earlier

Vietnamese CPI up 8.6 percent in August vs year earlier

	Published : Thu, 23 Aug 2007 09:23 By : Agencies Print this Story

HANOI (ThomsonFinancial) - Vietnamese consumer prices rose 8.6 percent in August from the same time a year ago, according to preliminary data released Thursday, heightening concern about rising inflation.

Vietnam has slashed a range of import tariffs and reduced retail fuel prices recently in a bid to keep the annual inflation rate below the yearly economic growth target of 8.2 to 8.5 percent for 2007.

A preliminary report by the government-run General Statistics Office said that CPI has risen 6.8 percent since the end of 2006, driven by a surge in food prices after recent floods and outbreaks of poultry and pig diseases. The index rose 0.6 percent in August from July.

'We aim at economic growth of between 8.2 and 8.5 percent, so the highest inflation rate (we want) is 8 percent,' Deputy State Bank Governor Nguyen Dong Tien said last week according to news site VietnamNet.

Vietnam this month slashed a wide range of import tariffs for consumer goods like food and dairy products, steel and building materials, and electronics, and also cut fuel prices, hoping to reduce the price fever.

The GSO said food prices, which form more than 40 percent of the basket of goods on which the CPI is based, were up 11.9 percent from a year ago, with rice and other grains increasing by 15.7 percent.

Housing and construction materials were up by 9.9 percent.

Gold cost 4.7 percent more than in August last year, and the dollar rate against the dong rose by 0.97 percent.

Experts say the high inflation rate is behind moves by the State Bank of Vietnam (SBV) to increase the national foreign currency reserves.

The SBV said it had spent 112,000 billion dong so far this year to buy seven billion dollars, almost doubling the national forex reserve in the first seven months of the year from late last year.

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