HSBC lowers Vietnam’s inflation forecast to 3.5 percent | Business

Illustrative picture (Picture: VNA)

HCM Metropolis (VNA) – HSBC has lowered its forecast on Vietnam’s inflation price in 2022 to three.5 % from its earlier prediction of three.7 % because of the steady home meals costs, which is anticipated to assist curb the nation’s headline inflation, in keeping with a report launched by the financial institution on June 14.

The financial institution defined that the inflation threat in ASEAN nations has elevated for the reason that starting of 2022, resulting in a excessive rise in each core and headline inflation charges in comparison with the interval earlier than COVID-19 broke out.

Nevertheless, the impacts are totally different on every nation, and inflation stress in Singapore, Thailand and the Philippines has turn into heavier, whereas in Vietnam, Malaysia and Indonesia, inflation has been underneath good management, in keeping with the report.

However headline inflation is more likely to enhance sharply within the second group quickly, particularly within the context of rising vitality costs, it predicted, including that though the world oil value has “cooled down” in comparison with the height in March, it’s nonetheless at a excessive degree, whereas the value of pure fuel continues to extend progressively.

In Vietnam, vitality value inflation has additionally persevered for lengthy. Transport costs hit a document excessive, surpassing meals inflation to turn into the principle driver of Vietnam’s headline inflation, it stated. Regardless of rising vitality costs, meals inflation has remained reasonable, serving to management the general enhance in headline inflation thus far, it added.

Within the report, HSBC additionally elevated its inflation forecast for Thailand, Singapore, Indonesia and the Philippines.

After contemplating each inflation and development, HSBC additionally revised its forecast for Vietnam’s working rates of interest in 2022.

Whereas the present inflation price stays beneath the 4 % goal, the financial institution expects persistent excessive vitality costs will proceed to push general costs up. It’s doubtless that inflation will generally surpass the State Financial institution of Vietnam’s ceiling price of 4 % within the second half of 2022 however solely briefly, stated the report. That scenario will doubtless trigger the financial institution to regulate rates of interest by 50 foundation factors within the third quarter of 2022 earlier than elevating the charges thrice, 25 foundation factors every time in 2023, the report underlined./.