HANOI: Vietnam’s inflation rate rose sharply in the first quarter of 2016 according to official figures released Thursday, a turnaround for the communist country which saw inflation dwindle to zero last year.
Year-on-year consumer price inflation was 1.25 percent in the first quarter, the General Statistics Office (GSO) said in a statement posted on its website, a sharp increase compared to the same period in 2015.
For the month of March, consumer prices rose 1.69 percent compared to 2015, the GSO added. For decades, Vietnam has suffered from runaway inflation — with triple digit increases in the 1980s and rates as high as 28.3 percent as recently as August 2008. Taming inflation has been a key priority for the Vietnamese government, which has repeatedly increased official interest rates in an effort to prevent the economy overheating.
But as inflation slowed sharply in 2014 and 2015, the government for the first time expressed concerned about deflation — a broader trend affecting the region. During the first three months of 2016, the highest consumer price increases were in the health sector (up 11.88 percent) and in education (up 3.63 percent), the GSO said.
“It is not a good sign because this trend shows the weaknesses of an economy whose development is not stable,” economist Bui Kien Thanh told AFP. Experts believe that inflation could exceed the official target of five percent this year, after hitting a record low of 0.63 percent in 2015, the lowest for 14 years.
Vietnam’s economy in 2015 grew at its fastest pace in five years, thanks to strong exports and record foreign investment, bucking the woeful regional economic trend. The communist nation recorded a GDP growth rate of 6.68 percent, easily surpassing the government’s 6.2 percent target. Official figures for GDP growth for the first quarter of 2016 are expected in the coming days.
