In its East Asia and Pacific Economic Update, the WB said Vietnam's inflation rate was expected to be 19 percent this year, before dropping to 10.5 percent in 2012.

It said Vietnam and Mongolia will be the only countries in the region to suffer from high inflation, with inflation in Mongolia expected to reach 17 percent next year.

"Vietnam's inflation is the highest in the region," Deepak Mishra, Lead Economist of the World Bank in Vietnam, said in a statement; adding that unlike in other countries, inflation is a major concern in Vietnam, as well as in Mongolia.

The WB also predicted that inflation is not likely to fall in the near future, with goods prices soaring, minimum wages adjusting, and an expected increase in power prices.

Deepak said that although only half of the six measures stated in the government's Resolution No 11 to curb inflation and stabilise the macro-economy have been appropriately conducted, Vietnam has gained certain positive results.

However, he also warned that such heartening results concerning the stabilisation of the macro-economy are not sustainable enough.

Thus, the government should not loosen its policies in order to avoid encountering the same volatile economic situation, he advised.

The East Asia and Pacific Economic Update is a comprehensive, twice-yearly review of the region's economies.

The report provides forward-looking analysis of the region's economic and social well-being, and includes data on key indicators for output, employment, prices, the public sector, foreign trade, external debt, and financial markets.

Last week Standard Chartered Bank also released a report on the two-year outlook for Vietnamese economic growth, which predicted that Vietnam's inflation will drop to 11.3 percent next year.

Tuoi Tre - November 24, 2011