Vietnam inflation up for second straight month

A cigarettes vendor sits behind a pile of empty cartons of cigarette brands on a Hanoi street in this file photo. Vietnamese inflation accelerated in January, official data showed Thursday, Jan. 24, 2013, reducing expectations of further monetary stimulus to boost the flagging economy. AFP FILE PHOTO

HANOI—Vietnamese inflation picked up in July for a second consecutive month, official figures showed Wednesday, following recent increases in fuel prices.

Consumer prices were up 7.29 percent year-on-year, against a 6.69 percent rise in June, according to the General Statistics Office, with analysts saying recent fuel price hikes were largely responsible.

“The July increase was mainly due to two recent rises in petroleum and gas prices in less than one month,” said Hanoi-based independent economist Le Dinh An.

Factory production also appeared to have improved in recent months, he told AFP.

Inflation has rebounded after hitting an eight-month low of 6.36 percent in May.

The same month the central bank cut interest rates for the eighth time in little more than a year to spur bank lending and boost consumption after economic growth fell to a 13-year low of 5.03 percent in 2012.

The authorities repeatedly raised interest rates in 2011 to cool down the economy and to rein in double-digit inflation, but last year were forced to reverse tack and resort to stimulus measures.

Vietnam’s economic growth inched up to 4.9 percent in the first half of this year, slightly higher than the 4.38 percent achieved in the same period of 2012.

Communist Vietnam is struggling with a host of economic woes, including lacklustre growth, sluggish domestic demand, a banking sector weighed down with high levels of toxic debt and record numbers of bankruptcies.

The government has targeted economic growth of 5.5 percent for 2013 although analysts warn this will be hard to achieve.