Vietnam: CPI forecast to rise in Q1/2006
Vietnam’s consumer price index (CPI) is estimated to surge three per cent in the first quarter of next year, a fall of 0.7 per cent on-year, the market management group forecasts. The group said that domestic prices would be affected by the high material prices in the world market, which would be maintained at high levels in the first months of 2006.
The international prices of crude oil would be fluctuated at around $60 per barrel, urea fertilizer at $230-250 a ton FOB basis, steel ingot at US$360/t and gold at $500 per ounce.
Besides, the prices of essential commodities will rise in early 2006 due to soaring demand during the Solar New Year and especially the country’s traditional Lunar New Year festival which falls on January 28-February 2 next year. The purchasing power is forecast to rise by 20 per cent on-year during these holidays.
The prices of rice, sugar, cement, and fertilizer would increase in the first quarter, while those of steel, paper, medicine, and construction materials would be stable, the group said.
At the year-end session of the 11th National Assembly, the central bank governor Le Duc Thuy forecast that the CPI rate would be around six per cent in 2006.
Vietnam’s CPI, or inflation rate, rose by 8.4 per cent this year, going far beyond the initial target, which the National Assembly set at 6.5 per cent early this year. The rate is slightly lower than the economic growth rate, which stood at 8.5 per cent. In 2004, the CPI index hovered at an extremely high rate of 9.5 per cent.