News / Asia

Inflation Squeezes Vietnamese Workers

A local commercial bank staff receives bricks of dong bank notes from a customer in Hanoi, February 23, 2011
A local commercial bank staff receives bricks of dong bank notes from a customer in Hanoi, February 23, 2011
TEXT SIZE - +

Vietnam recently devalued its currency, the dong, by 9.3 percent against the dollar. Analysts say soaring inflation here makes life harder for many Vietnamese workers.

Consumer prices in Vietnam this January were more than 12 percent higher than they were a year ago, reflecting rising costs of food, fuel and household goods.

High inflation is putting pressure on workers.

Nguyen Huy Thinh drives a bus in downtown Hanoi. He says he has trouble getting by on his $250 monthly salary. He says that while prices for gasoline and electricity are increasing, his salary stays the same. That makes it hard to support his family.

Despite a decade of strong growth, Vietnam had a $12.4 billion trade deficit last year, and inflation surpassed 11 percent for the year, despite the government’s attempt to limit it to 8 percent.

To contain inflation and cut the trade deficit, Vietnam devalued its currency, the dong, by 9.3 percent against the dollar earlier this month. The devaluation was the fourth since 2009.

Both Moody's Investors Service and Standard & Poor's downgraded Vietnam’s sovereign debt rating in December after state-owned shipbuilding conglomerate Vinashin defaulted on payment for a $600 million.

Having a lower rating makes it harder for Vietnam to borrow money abroad.

Adam McCarty is the chief economist for the consulting firm Mekong Economics, in Vietnam. He says the economy is not in crisis, but inflation is taking a toll on average workers.

"Normally poorer-than-average people on salaries or pensions are the ones who lose when inflation is high, and then more broadly, the pace of generating new jobs slows down somewhat if the economy’s got trouble," McCarty said.

McCarty said inflation also makes it harder for middle-class Vietnamese to buy property.

Some financial market analysts praise Vietnam for devaluing the dong, saying the new value better reflects prices on the black market, where traders exchange dong for gold and dollars. But other economists have warned that the government may need to do more to cap inflation and protect the economy.


You May Like

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Turkish Law Gives Spy Agency Controversial Powers

Parliament approves legislation to bolster powers of intelligence service, which government claims is necessary to modernize and deal with new threats Turkey faces More

Video Face of American Farmer Changing

Average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Face of American Farmer is Changingi
X
Mike Osborne
April 18, 2014
The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid