As industry output surges, so does inflation
Mar. 28 – Vietnam’s General Statistics Office (GSO) just reported a first quarter total industrial output of US$10.2 billion for the first quarter of 2008.
The figure represents a 16.3 percent increase over the first quarter of 2007. Vietnam’s private sector enjoyed the greatest gains, jumping 22.5 percent to US$3.5 billion –worth of production value.
The foreign-invested segment saw a 17 percent gain, while the State-owned sector managed 6.7 percent of growth. Processing and energy production, related industries, climbed a healthy 18 percent.
GSO pundits predict slower growth in the next quarter, as rising inflation is driving up the cost of materials, leaving both producers and consumers unstable.
In fact, the GSO further reports that inflation this March reached over 19 percent year-o-year, the fastest rise in more than a decade. Consumer prices spiked a steep 3 percent this March alone, representing an annualized surge of 16.4 percent for the first quarter of 2008.
Growth in GDP will have a hard time keeping the pace, with a GSO predicted rate of 8.5 to 9 percent, according to the Department of Pricing head Nguyen Duc Thang. He blamed excess circulating currency, recent severe weather, and petrol prices shooting up from February’s deregulation, for steadily climbing prices. He also predicted that CPI growth rates would remain in the double digits throughout the year.
The pressure of this runaway inflation is hitting families and markets as hard as it is industries.