od, the statistics office said

Thuong. "I don't trust Vietnamese dong."

February's inflation rate of 12.31 percent year-on-year was the highest in two years and far above the rates in Vietnam's neighbours.

The government does not want a repeat of 2008 when annual inflation hit 23 percent, said Giang Thanh Long, vice dean at the School of Public Policy and Management in Hanoi's National Economics University. "You cannot have high economic growth at the same time as high inflation," he said.



In 1986, communist Vietnam began to turn away from a planned economy to embrace the free market, a policy which led to growth among the fastest in Asia. GDP growth stood at 6.8 percent last year and the ruling Communist Party expects it to continue at seven to eight percent annually. Nonetheless the expansion has led to a complicated mix of challenges, including a trade deficit estimated at $12.4 billion last year. Citing weaknesses in the banking system, inflation and other economic risks, international ratings agencies last year lowered Vietnam's sovereign debt ratings.



During the recent five-year congress, the Communist Party announced an overhaul of its business growth model. The nation must "restructure the economy to speed up industrialisation and modernisation with fast and sustainable development," Communist Party leader Nong Duc Manh said. The government's shift to stability from an "addiction" to growth is welcome, but only time will tell if authorities are "willing to stick to this new marching order", said a foreign business analyst who declined to be named. Anh, of the Fulbright Program, said the government had done a good job in publicising its plan but he was sceptical of chances for success.

"The key thing now is implementation and... we don't see a clear vision, a clear picture", said Anh.





Vietnam sees inflation at 13.9% in March

AFP 24 March 2011



Vietnam's inflation rose to a two-year high in March, official estimates showed on Thursday, as the government shifts from a longstanding focus on growth towards stabilising its troubled economy. The consumer price index (CPI) is expected to jump 13.9 percent year-on-year in March, the General Statistics Office reported. Rising inflation has become a key policy concern for governments around Asia but consumer prices in Vietnam have risen faster than in neighbouring countries. Average CPI in the first quarter rose by 12.79 percent against the same period last year, led by a 17-percent increase in food, the statistics office said
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ut we have to keep trying to implement the government's [tightening] measures," Nguyen Tien Thoa, head of the Finance Ministry's price-management department, said in a statement published in the central bank's Thoi Bao Ngan Hang newspaper. Mr. Thoa said the key reasons behind the rising inflation include the economy's large total outstanding loans, which exceed gross domestic product by 20%, and the inefficient use of investment capital. "It will take at least a couple of months before we can see if the measures really work," Mr. Thoa said.


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