But some economists said they were still concerned inflation for the year might be high, largely due to government stimulus spending and credit growth last year.

The monthly 0.14 per cent inflation represented a sharp drop from March, when prices rose 0.75 per cent. Overall, prices rose 4.3 per cent in the first four months of 2010, and 8.7 per cent year on year.

"The problem is, will CPI inflation continue to be so low every month?" said economist Nguyen Quang A, former director of Vietnam's Institute of Development Studies. "I can't say Vietnam has controlled its inflation yet."

Another Vietnamese economist, who declined to be named, said he found the April CPI figures hard to believe, particularly those on food and foodstuffs, which the General Statistics Office said fell 1.9 per cent and 0.5 per cent respectively. "Let's ask housewives how much food and foodstuffs increased in April," he said.

Nguyen Dinh Anh, acting head of the government's Institute for Research on Markets and Prices, said the April CPI figures were not sufficient information to predict whether the government's inflation target for the year would be met.

"The important thing is that Vietnam's objective this year is to keep inflation in single digits," said Anh.

The CPI of the eating and drinking service group has declined 0.63 per cent in April after a consecutive increase since early this year. The prices of food and foodstuffs groups have represented decreases of 1.91 per cent and 0.53 per cent respectively.

While food prices fell in April, prices for housing and construction materials surged by 2.5 per cent.

Analysts early this year warned that Vietnam risked a serious inflation spiral due to credit expansion of 39 per cent in 2009. That was driven largely by government stimulus spending intended to counteract the global economic slowdown.

Deutsche Presse Agentur - April 27, 2010