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VietNamNews

Inflation holds steady in first nine months

Update: October, 07/2014 - 09:02
Customers purchase bottles of milk at a supermarket. The inflation rate in Viet Nam is expected to reach three to four per cent this year barring any sudden increase in the prices of goods and services. — Photo vietnamplus.vn
HA NOI  (VNS) — The inflation rate in Viet Nam is expected to reach three to four per cent this year barring any sudden increase in the prices of goods and services, the Voice of Viet Nam (VOV) reported.

In a report on the country's economic situation in the first nine months of 2014 which it released last week, the National Financial Supervisory Commission (NFSC) also said the consumer price index (CPI) in September remained stable and at the low level that was maintained in the past two years.

Despite seasonal factors in the past month, the education services sector increased by 7.1 per cent, making its CPI surge the highest in the past seven months.

However, inflation was at its lowest level, increasing by 3.62 per cent year-on-year. With the downward trend in inflation, the committee forecast the decreasing CPI to facilitate an interest rate decline.

The payment balance saw a surplus and stable exchange rate during the nine-month period. As of September 15, State budget overspending was estimated at VND124.5 trillion (US$5.9 billion), a 4.7 per cent year-on-year decrease.

The commission also said exports and imports witnessed a positive growth rate in the period, with a trade surplus of around $1 billion, accounting for 0.9 per cent of export turnover.

GDP growth has also been on an upward trend since the beginning of the year. Growth reached 6.15 per cent in the third quarter, higher than the 5.25 per cent recorded in the second quarter.

The NFSC predicted that the country's GDP this year would reach 5.8 per cent because of high third quarter growth.

However, the committee said difficulties remained for local businesses. A total of 48,330 companies shut down or suspended operations between January and September, representing a 13.8-per cent year-on-year increase.

The NFSC attributed this to the slow improvement in personal consumption and low private investment. Low demand and bad debts were the two main reasons preventing private businesses from increasing their investments.

To address these problems, the committee made five proposals: provide low interest rate capital for banks to reduce their lending interest rate, use State financial resources of the Viet Nam Asset Management Company to buy bad debts, accelerate investment disbursement from the State budget and Government bonds, improve administrative procedure reforms, and restructure State-owned enterprises. — VNS

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