While inflation is soaring across most of the world’s economies, Vietnam’s rate remains at a relatively low level, at 3.94% as of September this year, according to the data gathered by Investment Monitor.
A Financial Times report revealed that Vietnam’s rate is significantly lower than that of the other nations in the region — Indonesia (6%), Thailand (6.4%), Philippines (6.9%), and Singapore (7.5%).
Compared with the 2021 prices, the global inflation rate is expected to reach 8.8% in 2022, as stated in the International Monetary Fund (IMF) report.
Russia’s invasion of Ukraine has directly impacted global price levels, specifically on the cost of food and fuel. However, Vietnamese “consumers are largely insulated from the global surge in food prices because of ample domestic supplies, pork prices declining from last year’s peak, and a preference for rice, which remains cheaper than other grains like wheat,” according to IMF. Additionally, health and education services costs didn’t create a considerable impact and remained rather low.
Vietnamese Prime Minister Pham Minh Chinh assured the country would continue to stick to its target of keeping inflation under control while ensuring macroeconomic stability. He acknowledged that the weakening dollar and the drop in stock price make it more difficult to keep inflation low but emphasized the government’s efforts saying, “we need to stay vigilant (against risks), but we won’t get panic.”
In addition, economists have forecasted the country’s inflation will be kept at around 3.3-3.8% this year, close to the National Assembly’s capped target of less than 4%. World Bank’s rate is 3.8%, and the forecasted GDP growth of 7.5%. From the initial 3.7% inflation rate, HSBC lowered its numbers to 3.5% due to the stable domestic food prices.
Moreover, Focus Economics Consensus Forecast panelists expected that inflation in Vietnam will reach 3.6% in 2022 and 3.8% in 2023. The consumer price index (CPI) posted a year-on-year growth of 2.89% in the first ten months of 2022, while core inflation rose 2.14%, according to the General Statistics Office (GSO).
In comparison, inflation in the US is beginning to show signs of leveling off but is still high at 8.2% (as of September 2022).
China had the lowest inflation rate in August 2022, with only 2.5% (compared to the same month of the previous year). On the other end of the spectrum, the inflation rate in Russia stood at over 14% in the same month, Ukraine (nearly 25%), Germany (above 10%), the United Kingdom (over 10%), Argentina (83%) and Venezuela (over 114%).