AFP reported that Vietnamese inflation slowed to the weakest pace in a year in June 2012, mirroring slowing economic growth in the communist state.

According to the General Statistics Office, consumer prices were up by 6.9% YoY, after increases of 8.34% in May 2012 and 10.54% in April 2012. The inflation rate for the first six months of 2012 stood at 12.2% YoY.

Inflation hit 23% in August o2011, forcing the government to repeatedly increase official interest rates in an effort to prevent the economy overheating.

But slowing economic growth and easing price pressures have since triggered a turnaround in policy, with a series of interest rate cuts by the central bank this year.

Economists say the sharp slowdown in consumer prices is the result of the tighter monetary policy and cooling demand for Vietnamese exports.

Vietnam's economic growth slowed to 4% in the first quarter of 2012, the weakest in three years.

Vietnam's economy grew 5.9% in 2011 and the government is aiming for a 6% to 6.5% expansion in 2012.

Vietnam's central bank this month announced its fourth round of cuts in 2012 to boost the economy, lowering the refinancing rate, charged on loans to commercial banks, to 11% from 12%.

Source - AFP

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