Vietnam’s central bank says inflation is higher than targeted but remains under control

[HANOI] The rise in annual inflation in September has put pressure on Vietnam’s monetary policy management for the rest of this year but prices remain under control, central bank deputy governor Pham Thanh Ha said on Wednesday (Oct 7).

Vietnam’s annual inflation in September was 5.08 per cent, compared with 4.89 per cent in August, according to data from the statistics office.

“This is the highest reading in several years, putting huge pressure on managing prices and controlling inflation during the rest of the year,” Ha told a regular press conference in Hanoi.

Ha said recent interest rate hikes by central banks, including the Fed, has also put pressure on emerging and developing economies, including Vietnam.

Export-reliant Vietnam has faced higher prices for imported fuels this year due to the Iran war.

Total bank lending as of Sep 30 had risen 11.59 per cent from the end of last year, and was up 16.69 per cent from a year earlier, Ha said.

The country has a target of keeping inflation at 4.5 per cent this year.

Vietnam reported gross domestic product growth of 9.95 per cent in the third quarter, and its fourth quarter growth must be higher than 12 per cent for the country to meet its full-year growth target of at least 10 per cent, the head of the central bank’s monetary policy department, Pham Chi Quang, told the same conference.

The central bank said it will pursue flexible monetary policy for the rest of the year, striking a balance between keeping inflation under control and supporting economic growth.

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