Vietnam inflation hits 27 percent, trade gap widens

HANOI, July 24, 2008 (AFP) – Vietnam’s annual inflation rate hit 27 percent in July, the government said Thursday, as rocketing food and fuel costs saddle its economy with one of Asia’s toughest battles against rising prices. The figure was only a little higher than June’s 26.8 percent, but the government’s decision earlier this week to hike retail petrol prices more than 30 percent is thought likely to push inflation still higher.

Other official data Thursday estimated Vietnam’s trade deficit for the January-July period at 15 billion dollars as imports surged more than 50 percent.

The figures come after the Asian Development Bank on Tuesday warned Vietnam to take decisive measures to avoid the kind of economic meltdown suffered by Thailand in 1997, which triggered the Asian financial crisis.

Vietnam was once widely hailed as Asia’s next economic tiger, but has been battered by double-digit inflation, a ballooning trade gap, tumbling share prices and worries about the banking sector and its currency, the dong.

In July alone, food and beverage costs rose by 44.7 percent year-on-year, while the price of the staple food rice and other grains was up 72.7 percent, the state-run General Statistics Office