Rising energy prices to drive inflation: HSBC
An employee holds a gas gun at a gas station in Ho Chi Minh City. Photo by VnExpress/Huu Phuoc
HSBC raised its inflation forecast for Vietnam from 2.7% to 3%, taking into account higher energy prices.
“We are slightly raising our average inflation forecast for 2022…but this should not pose a major risk for the State Bank of Vietnam, as it is likely to remain well below the 4% inflation target,” the bank said in a note.
Rising global fuel prices and reduced production at Vietnam’s largest refinery, Nghi Son, have led to fuel shortages in some southern localities in recent weeks.
On Friday, the government raised petrol prices by around 3.9% to VND 25,320 per litre. In the past two months, it has increased the rate by 11%.
Energy inflation continued to accelerate in January and rose 1.9% year-on-year, while food price inflation has yet to accelerate, HSBC said.
However, while rising inflation in parts of Southeast Asia (Thailand and Singapore) has drawn attention, inflation in Vietnam should not be a big concern this year, the official said. lender.
As Vietnam continues to stick to its “living with the virus” policy, consumer confidence is on the rise, leading to a rebound in consumption, he said.
After falling 4% in 2021, retail sales rose 1.3% year-on-year in January 2022, he said.
“Vietnam’s main growth engine is expected to rebound strongly as labor shortages continue to ease.”
Most key sub-indicators continue to show sustained recovery, offering optimism that manufacturing would likely return to pre-Covid-19 levels, he added.
Inflation hit its lowest level in six years at 1.84% last year, according to government data.
The Asian Development Bank said inflation could reach 3.8% this year.