Vietnam: Inflation comes in at highest level since July 2020 in June
Consumer prices increased 0.69% in June over the previous month, picking up from the 0.38% rise logged in May. The figure was primarily driven by rising prices for food. In addition, price pressures for transportation rose at a stronger rate.
Inflation increased to 3.4% in June from May’s 2.9%. June’s reading was the highest inflation rate since July 2020. Annual average inflation rose to 2.3% in June (May: 2.2%).
Price pressures are likely to persist throughout the year, as private consumption and investment accelerate. Moreover, the rising prices of key commodities on global markets—especially oil and agricultural products—will boost inflation as well. Nevertheless, forecasts for interest rate hikes by Vietnam’s Central Bank and the anticipated slight appreciation of the dong should offset this somewhat, and our panelists forecast average inflation to end the year well below the government’s 4.0% target.