return icon

Inflation not a source of concern for Vietnam: SSI

Vietnam’s consumer price index (CPI) is set to average 2.89% in 2021, below the government’s target of 4%.

Inflationary pressure has forced central banks around the world, including those from Russia, Brazil, or Turkey, to raise their respective policy rates in the first quarter, but in case of Vietnam, inflation should not be a source of concern, according to SSI Securities Corporation (SSI).

 Customers at a super market in Hanoi. Photo: Pham Hung


In the global scale, the expansion of money supply is a common solution as governments turn to stimulus measures to aid economic recovery from the Covid-19 pandemic.

However, “the fact such approach has been adopted for over a year and the prospect of V-shaped recovery after the pandemic is contained globally leads to inflation rise,” said the SSI in a note, adding inflation could cut short the super-easing monetary period worldwide.

In Southeast Asia, countries such as Thailand, Singapore, Indonesia and Malaysia have pushed for strong expansion of money supply since March, but the State Bank of Vietnam (SBV), the country’s central bank, continued to keep the growth rate of M2 (measures money supply that covers cash in circulation and all deposits) at a round 13-14% year-on-year, which is in line with the credit growth.

Since the beginning of the year, the SBV has lowered its interest rate cap three times by a combined of 1.5-2 percentage points per annum, which is the largest cut in the region, but has not opted for pumping additional money via open market operations (OMO).

According to the SSI, the amount of cash injected into the market last year was mainly from foreign exchange transaction to build up foreign exchange reserves, while there were no cash pumped into the market via OMO and foreign exchange transaction since early 2021.

“This shows the government’s cautious approach in managing monetary policy,” stated the SSI.

In March, Vietnam’s consumer price index (CPI), the main gauge for inflation, declined by 0.27% month-on-month and up 0.29% year-on-year, the lowest growth rate for the past 20 years.

This resulted in a decline of 0.12% month-on-month in the inflation rate in March, marking an overall growth of 0.67% in the rate for the first three months of the year.

“We expected the CPI as of late 2021 to expand by 4.07% against the same period of last year, and average 2.89% for the whole year, which is below the 4% target set by the government,” said the SSI.

In a recent move, the SBV has assigned the credit growth target for state-owned commercial banks of 6.5-7.5% (except for Vietcombank at 10.5%), and private banks from 8-12%, which the SSI said are in line with the country’s target for credit growth of 12% in 2021.

For short-term, the SSI expected the SBV to maintain its low-interest rate environment, but deposit rates are set to rise by 0.3-0.5 percentage points in late 2021 as economic activities heat up.

While Vietnam’s GDP growth in the first quarter reached 4.48% year-on-year, lower than SSI’s estimated 4.5-5%, the securities firm predicted the country’s economic growth would hit its yearly peak in the second quarter and settle at 6-6.5% for the year.


IMF: Vietnam’s inflation in 2021 may remain at 4%

IMF: Vietnam’s inflation in 2021 may remain at 4%

The prolonged COVID-19 pandemic is forecast to keep hampering Vietnam from reducing inflation this year, despite the strong efforts to stimulate fiscal and monetary policies.


Gia Lai province has new Chairman

The Government has confirmed Mr. Truong Hai Long as new Chairman of the Gia Lai provincial People's Committee.

Investors dump shares in panic, VN-Index drops nearly 46 points

The VN-Index officially lost the 1,110-point mark, retreating to the bottom made in February 2021 in the first trading session of October on October 3.

First Vietnam monkeypox case returns from Dubai

The Ministry of Health confirmed on October 3 that a woman returning from Dubai has infected with the monkeypox virus, the first case recorded in Vietnam so far.

Coca-Cola injects US$136 million into Long An plant

Coca-Cola Beverages Vietnam Co., Ltd is poised to start development on a beverage factory with total investment capital exceeding US$136 million in Phu An Thanh Industrial Park of Ben Luc district in the southern province of Long An.

List of 48 websites showing signs of law violation announced

The Ministry of Information and Communications (MIC)’ Authority of Broadcasting and Electronic Information has announced a list of 48 websites showing signs of law violations as of the end of the third quarter.

Secretary of Hai Duong Provincial Party Committee expelled from Party

The Party Central Committee decided to expel Secretary of the Hai Duong Provincial Party Committee and Chairman of the provincial People’s Council Pham Xuan Thang from the Party during the first working day of its sixth plenum in Hanoi on October 3.


Hanoi seeks UNESCO's recognition for Mo Muong

Seven must-visit destinations in Vietnam for coffee connoisseur

From the 19th century until now, coffee has taken a journey to become an irreplaceable part of Vietnamese culture and life.

Petrol prices fall to over a year record low of VND21,000/litre

Petrol prices tumbled to the lowest level in more than a year in the latest adjustments made on October 3 by the Ministries of Industry and Trade and the Ministry of Finance.

Foreign ODA and concessional loans reach 15.5% of target

Disbursement of foreign official development assistance (ODA) and concessional loans has been slow, achieving only 15.48% of the target, the Ministry of Finance reported.

More foreign visitors to HCMC signals thriving tourist season

Roughly 100 French, American, German tourists traveled to Ho Chi Minh City on French Le Laperouse yacht of Ponant after the last visit in mid-November 2019 signaling a thriving tourist season.

First monkeypox infection detected in HCM City

The Ho Chi Minh City Department of Health has just announced the first reported case of monkeypox in Vietnam.


2.97 billion USD in FDI poured into HCM City in 9 months

Trendy jobs in Vietnam

New and fashionable professions are being pursued by many young people. But not everyone is succeeding.

Shooting star targets bright future

After the retirement of senior champions, the Vietnam shooting team is now relying on its younger athletes, such as 18-year-old Phi Thanh Thao, who was recently nominated as Best Young Athlete of 2022 at the prestigious Victory Cup.