Vietnam Inflation Slows as Fuel Tax Cuts Keep Lid on Prices

Covid-19 wreaked havoc on both sides after the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August 2020.

 

Vietnam’s headline inflation slowed more than expected in July, allowing room for the central bank to stay accommodative to support the economy’s recovery.


Consumer prices rose 3.14% in July from a year earlier, according to data released by the General Statistics Office in Hanoi. That’s slower than the median estimate for a 3.3% gain in a Bloomberg survey of economists and compares to the 3.37% rate in the previous month.


The gains are well below the government-set 4% target and follow fuel tax cuts to ease price pressures. That allows the State Bank of Vietnam room to stick with its easy monetary policy, a luxury in a world fighting inflation with rate hikes, with two Asian central banks resorting to emergency moves this month.


Source: CCIPV / Bloomberg / Nguyen Dieu Tu Uyen / Nguyen Kieu Giang / Nguyen Xuan Quynh / Mai Ngoc Chau