Vietnam inflation hits 28%, trade gap grows
27/Aug/2008 Intellasia | AP
Aug 27, 2008 - 7:00:00 AM
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Vietnam's inflation rate has risen to its highest level in 17 years, hitting 28.3% in August, while the trade gap continued to widen, the government said Monday.
The skyrocketing consumer price index was driven by price increases in food, transportation, housing and construction materials, said the general Statistic Office, which often issues the data ahead of the month's end based on estimates.
Vietnam's inflation rate is among the highest in Asia.
Overall food costs were up 44.15% from a year ago, the government said. The price of housing and construction materials rose 27.4%, and transportation costs increased by 25.6%.
The inflation rate was 27% in July, 26.8% in June, and 25.2% in May.
The Ministry of Planning and Investment has forecast that inflation for all of 2008 could hit 25%.
Soaring inflation has led to a wave of strikes at factories around the country from workers seeking higher wages.
As part of its effort to curb inflation, Vietnam's government has increased interest rates and postponed thousands of public investment projects. The government also plans further spending cuts, according to the state controlled media.
The trade deficit continued to widen in the first eight months of the year, reaching nearly US$16 billion --already more than the US$14.1 billion for all of 2007. Through August, imports totalled nearly US$60 billion, while exports brought in more than US$43 billion.
Imports in August surged by 54.1% from a year ago, while exports increased by 40.6%, the statistics office said.
The Asian Development Bank has lowered its growth forecast for Vietnam to 6.5% this year and 6.8% next year.
Last year the country's economy expanded by 8.2%.
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