Inflation in vietnam: A glance from macroeconomic perspective

Abstract

A typical inflation is one of common economic phenomena but high inflation is distortion resulting in the instability in economics and society. Recently, such a distortion has been happening in the Vietnamese economy, particularly, it seems to be severe in the early months of the year 2008. This issue has been concerned by many groups including citizens, the Government and researchers. Citizens have various responds to this phenomenon. Different points of view are also given as well as solution to control the increasing inflation.

In order to giving a better understanding of the current inflation in Vietnam and of Vietnamese Government's policies, effects of inflation on economy was analyzed and the reasons of inflation which could be demand pulling, cost pushing, monetary problem and others was explained. However, the global economic crisis has also caused negative effects on Vietnamese economy leading to those above problems. Moreover, the inconsistent management in monetary and pricing policies have added to such a high inflation in Vietnam. Finally, recommendations in terms of monetary and pricing policies to control the inflation are presented in this paper.