Inflation this year will fluctuate at about 3 percent due to adjustmentsin public services, taxes and fees, the Vietnam Institute for Economicand Policy Research (VEPR) has forecast.
If no price hike is seenin public services, such as health care and education, environmentprotection taxes and road fees, the inflation rate will be about 1percent, the institute says in its latest report.
The reportfurther says that prices of basic commodities are likely to continue todecrease from now until the end of the year, however, a significantchange in oil prices will put pressure on inflation.
As forforeign exchange rates, the report forecasts that the central bank couldadjust the dollar/dong exchange rate up 2 percent, as planned thisyear. The adjustment, if it is taken, will be in the final quarter ofthis year. In January 2015, the State Bank of Vietnam devalued the dongby 1 percent, from 21,246 VND to 21,458 VND per US dollar, which was thefirst exchange rate adjustment since June 2013.
The reportprojects that Vietnam's economic growth this year will be 6.3 percent ifoil prices average roughly 60 USD per barrel throughout the year.
Loweroil prices, however, may cause a State budget deficit higher thanexpected, the report says, estimating that this year's budget deficitwill be roughly 45 trillion VND (2.08 billion USD), or roughly 6-6.5percent of GDP if oil prices average 60 USD per barrel.
Such a deficit will force the Government to cut investment spending this year, the same as in 2014, VEPR warns.
Italso forecasts that the country will have a trade deficit this year,after three consecutive years of trade surpluses, however, the overallbalance will remain as a surplus thanks to an offset from foreign directinvestment (FDI) capital and overseas remittance flows.
Also inthe report, the institute has recommended the Government make abreakthrough in its policy reforms and actively create favourableconditions for private enterprises.
New policies should be mapped out to create a fair investment environment for all economic sectors, it says.-VNA
If no price hike is seenin public services, such as health care and education, environmentprotection taxes and road fees, the inflation rate will be about 1percent, the institute says in its latest report.
The reportfurther says that prices of basic commodities are likely to continue todecrease from now until the end of the year, however, a significantchange in oil prices will put pressure on inflation.
As forforeign exchange rates, the report forecasts that the central bank couldadjust the dollar/dong exchange rate up 2 percent, as planned thisyear. The adjustment, if it is taken, will be in the final quarter ofthis year. In January 2015, the State Bank of Vietnam devalued the dongby 1 percent, from 21,246 VND to 21,458 VND per US dollar, which was thefirst exchange rate adjustment since June 2013.
The reportprojects that Vietnam's economic growth this year will be 6.3 percent ifoil prices average roughly 60 USD per barrel throughout the year.
Loweroil prices, however, may cause a State budget deficit higher thanexpected, the report says, estimating that this year's budget deficitwill be roughly 45 trillion VND (2.08 billion USD), or roughly 6-6.5percent of GDP if oil prices average 60 USD per barrel.
Such a deficit will force the Government to cut investment spending this year, the same as in 2014, VEPR warns.
Italso forecasts that the country will have a trade deficit this year,after three consecutive years of trade surpluses, however, the overallbalance will remain as a surplus thanks to an offset from foreign directinvestment (FDI) capital and overseas remittance flows.
Also inthe report, the institute has recommended the Government make abreakthrough in its policy reforms and actively create favourableconditions for private enterprises.
New policies should be mapped out to create a fair investment environment for all economic sectors, it says.-VNA
