Aug 26, 2008, 5:13 GMT
Hanoi - Vietnam's inflation rate in hit 28.3 per cent year-on-year in August, the highest level in 17 years, local press reported Tuesday.
A report issued by the Government Statistics Office late Monday said the inflation rate rose by 1.56 per cent compared with the previous month, after falling from 2.2 per cent in June to 1.1 per cent in July.
The report said the skyrocketing rise in consumer prices was triggered by price increases in food, transportation, housing and construction. Food prices were up 44.15 per cent compared with the same period last year.
July's hike was ascribed to a fuel price increase late in the month.
Government officials said the monthly inflation rate was lower than anticipated. They feared a gasoline price hike by 31 per cent in late July would drive August inflation to at least 1.7 per cent.
Prices of transportation and communication saw the highest month-on-month growth at more than 9 per cent, followed by housing and construction materials, which rose 2.2 per cent.
Vietnam has been struggling to curb double-digit inflation. The government has repeatedly tightened credit rules for banks and has raised the prime interest rate to 14 per cent.
On August 14, the government reduced retail gasoline prices by 5.2 per cent following the decline of world crude oil prices below 120 dollars per barrel.
The measure was aimed at cushioning poor people dependent on gasoline use, such as taxi drivers, fishermen, and people commuting to work via motorbike.
The Ministry of Planning and Investment, which expects annual inflation for 2008 to hover around 25 per cent, announced last month that the government had cut or delayed nearly 3,000 state-funded investment projects with a total investment capital of 36 trillion dong (2.14 billion dollars).
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