Fuel, food lift inflation in Vietnam's largest city

Soaring food and fuel prices have driven annual inflation in Ho Chi Minh City, Vietnam's business centre and the country's largest city, to 27.5 percent this month, the city's statistics department said on Friday. Consumer prices this month in the city are expected to rise 2.09 percent from July when prices were only 0.54 percent above June, the Statistical Office of Ho Chi Minh City said in its monthly report. A 36 percent increase in domestic fuel prices on July 21 prompted analysts to predict Vietnam's inflation would hit 30 percent this month, the highest level in Asia.

The report said transport, posts and telecoms fees in August would rise a combined 20.9 percent from the same month last year, compared with the annual rise of 11.8 percent in July. Food prices in the city of 8 million people would soar 84 percent this month from last August, less than 89 percent in July as the summer-autumn rice crop harvesting has nearly finished in the nearby Mekong Delta. Consumer prices in Hanoi this month will rise 1.9 percent from July, faster than the monthly growth of 1.7 percent in July. The consumer prices in Ho Chi Minh City and Hanoi are early indication for Vietnam's inflation. The government's statistics office is expected to release the country's inflation data next week.

Last week Vietnam cut petrol prices by up to 5.3 percent, but its impact will not be seen in August monthly inflation data as statistics agencies stop compiling data on the 15th day of each month to calculate the consumer price index. The Finance Ministry has said it would continue to cut petrol prices if world oil prices further decline. U.S. light crude for October delivery CLc1 dipped 10 cents to $121.08 a barrel by 0222 GMT, after jumping nearly 5 percent on Thursday amid a broad-based rebound in commodities. (Reuters, 22 August 2008)