Standard Chartered sees Vietnam inflation higher than central bank forecast

“Over the medium time period, demand-push inflationary elements are more likely to kick in because the financial system recovers,” the lender stated in a word, including that supply-side elements pose upside dangers to inflation, notably given the continuing geopolitical state of affairs.

It forecasts an additional enhance within the price subsequent 12 months to five.5 %.

The State Financial institution of Vietnam targets inflation of no more than 4 % this 12 months.

Costs rose by 1.8 % final 12 months, the bottom price in six years.

The Asian Growth Financial institution this month forecast Vietnam’s inflation to hit 3.8 % this 12 months and 4 % subsequent 12 months, pointing to the instability in international oil costs.

Commonplace Chartered was assured about Vietnam’s progress potential, forecasting GDP progress of 6.7 % this 12 months (2.6 % final 12 months), saying the latest bounce in financial indicators have develop into extra broad-based.

Tim Leelahaphan, the financial institution’s economist for Thailand and Vietnam, stated: “The federal government lifted its quarantine requirement for worldwide arrivals in mid-March. We expect the reopening of tourism, which accounts for near 10 % of GDP, is the important thing improvement to observe within the second quarter after a two-year closure.”

Vietnam stays a producing hub and a key hyperlink within the international provide chain regardless of geopolitical and pandemic-related challenges, the financial institution stated.

FDI began recovering this 12 months after contracting final 12 months, and the financial institution expects this to proceed, notably in sectors resembling manufacturing, electrical energy and fuel,.

A number of main international tech firms have shifted (or plan to shift) manufacturing to Vietnam from China in recent times to diversify their provide chains, Leelahaphan added.