HSBC forecasts VN’s Stable Inflation Rate at 3%
VGP – Viet Nam’s inflation rate in 2021 is set to average around 3% in 2021, according to the HSBC’s latest report.
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HSBC expected the central bank to keep its refinancing rate unchanged at 4%.
Viet Nam’s February month-on-month inflation momentum rose by an eight-year-high pace at 1.5%. After a one-off electricity charge subsidy from Electricity Group Vietnam (EVN) in January, electricity prices jumped 20% month-on-month. Meanwhile, rising food prices and higher transport costs also contributed to raising inflation rate.
While electricity price volatility is perhaps a one-off administrative adjustment, food prices and transport costs are worth watching closely, as they both weigh heavily in the overall CPI basket, with weightings of 34% and 10%, respectively, according to the bank.
Since the end of 2019, higher pork prices have pushed up food inflation, even to the extent that headline inflation temporarily breached the “4% inflation ceiling” for four consecutive months./.
By Kim Loan