The nation's inflation rate in the second quarter will ease to 10.9 percent, before dipping back into single-digit territory in the third and fourth quarters, Standard Chartered Bank has forecast.
Inflation in March fell to 14.1 percent from a peak of 23 percent last August, the bank noted.
Moderated inflationary pressures, coupled with an improved balance of trade and foreign reserves, should provide the State Bank of Vietnam (SBV) with ammunition for further interest rate cuts during the rest of the year, Standard Chartered said, predicting that the refinance rate would be cut to 12 percent this second quarter and to 11 percent by the end of the year.
With inflation down to 14.1 percent in March from its peak of 23 percent seven months earlier, along with a stable currency, the State Bank had room to shift its attention to reinforcing economic growth, Standard Chartered said.
"Although growth is at its slowest since 2009, there are reasons to remain optimistic," the bank said.
During the 2009 downturn, the economy grew at a respectable 5.3 percent even though the first-quarter growth was a meagre 3.1 percent.
The bank therefore maintained its forecast of 5.8 percent growth this year, with a pace in the second quarter of 5.4 percent to gradually accelerate to 6.4 percent and 6.6 percent in third and fourth quarters, respectively.
Standard Chartered has also forecast that two-year Government bond yields would ease to 10.6 percent this year, down from the current 10.8 percent.-VNA
Inflation in March fell to 14.1 percent from a peak of 23 percent last August, the bank noted.
Moderated inflationary pressures, coupled with an improved balance of trade and foreign reserves, should provide the State Bank of Vietnam (SBV) with ammunition for further interest rate cuts during the rest of the year, Standard Chartered said, predicting that the refinance rate would be cut to 12 percent this second quarter and to 11 percent by the end of the year.
With inflation down to 14.1 percent in March from its peak of 23 percent seven months earlier, along with a stable currency, the State Bank had room to shift its attention to reinforcing economic growth, Standard Chartered said.
"Although growth is at its slowest since 2009, there are reasons to remain optimistic," the bank said.
During the 2009 downturn, the economy grew at a respectable 5.3 percent even though the first-quarter growth was a meagre 3.1 percent.
The bank therefore maintained its forecast of 5.8 percent growth this year, with a pace in the second quarter of 5.4 percent to gradually accelerate to 6.4 percent and 6.6 percent in third and fourth quarters, respectively.
Standard Chartered has also forecast that two-year Government bond yields would ease to 10.6 percent this year, down from the current 10.8 percent.-VNA
