>> Expert predicts CPI to rise 11% this year

>> November CPI records highest increase in 15 years

>> NA Deputy talks about inflation and economic policy

Distinguished international representatives warned Vietnam of high inflation rates this year at the Consultative Group Meeting in Hanoi on December 7-8.

Commodity prices in Vietnam sharply increasing

Tanizaki Yasuaki, Japanese Ambassador to Vietnam, highly appreciated the Vietnamese government’s efforts to realise the economic growth goal of 6.5% in 2010, but expressed his concern about the country’s high inflation rate and devaluation of the Vietnam dong.

He expected more from the Vietnamese government’s measures to recover the trust of donors in the value of the Vietnam dong.

A report from the World Bank (WB) released at the Consultative Group (CG) Meeting indicated that Vietnam’s inflation rate sharply increased in October and November, bringing the national inflation rate level in the first eleven months to 9.6%.

According to the report, Vietnam’s inflation rate this year can climb to 10.5% against the National Assembly’s set target of 8%. It also pointed out that Vietnamese policies still focus on economic growth goals rather than maintaining macro-economic stability. The WB suggested that Vietnam should use price controls through setting up price stabilisation funds.

Earlier, the Ministry of Industry and Trade said it is challenging for Vietnam to keep consumer price index (CPI) at single figures when it is forecast to grow between 1.3% and 1.5% in December against November. Some local experts forecast that Vietnam’s inflation rate may hover at 11% this year.

During the CG Meeting, officials from donors put forward measures for Vietnam’s economic sustainable development. Victoria Kwakwa, WB Director in Vietnam, said Vietnam should have new approach ways for economic growth, not only depend on natural resources like it does currently.

The US Ambassador to Vietnam, Michael Michalak, urged Vietnam to raise operation capacity of state-owned enterprises to create an equal competition environment and use capital sources more effectively.

The CG Meeting is a forum for frank discussion between the Vietnamese government and international donors on the country’s opportunities and challenges. At the 2009 event, donors pledged to provide over USD8 billion in official development assistance (ODA) for Vietnam, a record high.