Moody's predicts gradual decrease in inflation in Asia-Pacific, with Vietnam to peak in Q1 2023

Inflation has already peaked in most of the countries in the region and is expected to trend downwards, with the average forecast for inflation in the Asia-Pacific region at around 2.8% for this year and 2.5% for the next.

According to Moody's economic expert, Katrina Ell, the cooling off of inflation in Asia is mainly due to the fall in world oil prices and food prices.

However, in Vietnam, various factors such as food prices, fuel prices, household goods, and construction costs are contributing to inflation. Moreover, controlling inflation in Vietnam continues to be a challenge this year, especially with potential changes in electricity prices.

Despite these challenges, Moody's believes that Vietnam's inflation will peak in the first quarter of this year and gradually decrease thereafter. To help reduce the burden on low-income households, there may be a need to provide more energy price subsidies. Overall, Moody's experts suggest that loosening supply constraints and reduced borrowing costs will aid in bringing down inflation in the region.