Consumer prices rose 9.2% from a year earlier, easing from an 11.3% pace in March, according to figures from the general Statistical Office in Hanoi. Prices gained 0.4% in April from March.

Inflation in Vietnam has eased since surging last August to 28.3%, allowing the central bank to cut interest rates to help fight the effects of the global economic slump. Lower food and energy costs have damped overall price gains, while slower domestic economic growth has reduced wage pressures, the International Monetary Fund said this month.

"Inflation has been brought under control," prime minister Nguyen Tan Dung told investors at a conference in Hong Kong on April 20.

Overall food prices gained 14% in comparison with a year earlier, down from a 17.1% rate in March. Prices in the rice category advanced 16.9% from April 2008, slower than March's 24% increase.

Vietnamese rice export prices as of the week ending April 7 were unchanged from a year earlier, as a higher yield and larger estimate of the country's rice-growing area led to an upward revision of production estimates in the 2008/2009 crop year, the US Agriculture Department said this month.

Rice Prices

"The rice market may stay where it is, or come down a little bit depending on what happens with Indian exports," said Mamadou Ciss, chief executive of Singapore-based rice brokers Hermes Investments Pte Ltd "There's nothing really out there now to boost prices significantly."

Prices in the category including construction materials rose 0.9% from a year earlier.

"Steel prices went up too quickly last year, and now with the slowdown in the global economy, there's too much capacity in the market," said Don Lam, chief executive of Vinacapital Investment Management Ltd in HCM City. "It will take a while for capacity to catch up with demand."

Prices in the category including transportation declined 6.5% from a year ago, as the global price of crude oil tumbled 59%.

State Bank of Vietnam Governor Nguyen Van Giau has asked central bank officials to "focus on managing monetary policy in a flexible and effective manner to prevent the risk that inflation will return," according to a statement posted on the bank's Web site today.

The central bank has cut its benchmark interest rate to 7% now from 14% in October, and may cut the rate to 5% by June, Standard Chartered Plc predicted this month.

"We expect inflation to stay in single digits this year, but there may be a spike here and there," said Lam of Vinacapital. "There is so much money in the banking system right now."

Bloomberg - April 24, 2009