Vietnam Inflation, Sept. 2008

[Wrong Turn]

I live in Ho Chi Minh City (Saigon), and we're all aware of rising prices. Inflation in Vietnam is one of the highest in the world at about 30% year-to-year.

Obviously, the locals on lower pay scales are feeling worse then expats. Especially those with children, families, etc.

Can anyone else comment on the current CPI/inflation conditions? How is it affecting you?

More importantly, when will it end?

There could be a time when it will not be worth it to work and live here, but I think that is a drastic thought at this point.

[SoCal]

Hi WT,

I live in HCMC as well, and it is kind of a mix bag.

I see prices up, but as you say it really doesn't effect me, as it does the locals. I can adjust my living just a little bit, like eating an extra meal at home, or an extra meal a week of local food, and my over all spending remains unchanged, and I don't notice the impact on my life style.

My lunch has went from 10k to 15k in the last year, but the dong has went from 16,100 to 15,600 to 19,500, and now fairly stabalized at 16,600. So what is the exact impact? Don't know except my lunch is still less than a dollar.

I think Vietnam is having some much needed growing pains, but glad to see things stabalizing a bit (both currency and inflation). I think that is the consensus in the market after all the recent hysteria. While the government isn't doing a perfect job, they did quite a good job at stabalizing things, and most agree the future is still bright for Vietnam. I for one am in that camp, but then again my alternative is the US.

[PhilHarries]

I agree with SoCal. Here in Quang Ngai, central VN, we don't notice the price rises as much as the locals. Sure some of the restaurants have put up their prices a bit but not by 30%. Building materials, especially steel, on the other hand are rising dramatically but that's more due to demand. Of course gasoline price has increased as it has worldwide.

But let's get down to one of life's essentials, beer.

A bottle of Bia Saigon cost 6000 VND July last year and now in the same place it is 7000.

[Wrong Turn]

Good points, SoCal and Phil,

I've made the same adustments. Eating an extra meal at home. I like local food and have been eating at more VN restaurants. I've been very selective at the "foreign/tourist" area restaurants.

One major fixed expense is, rent. Rent is where I've been very lucky (so far). My landlord has (I think) grandfathered me, and I pay 30% less for the same apartment that new tenants are paying. Perhaps this is because I never complain, pay the rent on time, and I've been in the same apartment for a few years.

Yes, the Dong has stabilized and I happy about this. Has inflation been tamed? I hope so. I haven't read the most recent CPI reports.

I agree, the future of Vietnam does look bright.

[PhilHarries]

I agree, the future of Vietnam does look bright.

The advantage of a one party state?

Long term planning is unaffected by periodic changes of government. Now that the government is heading towards a hybrid solcialist/capitalist market structure things are turning around. Sure the country has a long way to go to get to where Thailand is but at least it is heading in the right direction.

Sorry, off topic.

Yes eating at VN restaurants is certainly one way to save money. We don't have too much choice here, it's Vietnamese food or one French restaurant in town. There is one place that also does Indian food and a dedicated Indian restaurant just on the verge of opening so things are becoming a shade more cosmopolitan.

As for rents the script here seems to be once an agreement is signed that is the agreed rent period. We've had people here in rented accommodation for nearly two years and only one has moved house due to increased rent.

[Wrong Turn]

I agree, the future of Vietnam does look bright.

The advantage of a one party state?

Long term planning is unaffected by periodic changes of government. Now that the government is heading towards a hybrid solcialist/capitalist market structure things are turning around. Sure the country has a long way to go to get to where Thailand is but at least it is heading in the right direction.

Sorry, off topic.

Phil, I think you're actually ON topic.

Inflation is related to the future of Vietnam, and the gov is part of the economic-future puzzle.

Yes eating at VN restaurants is certainly one way to save money. We don't have too much choice here, it's Vietnamese food or one French restaurant in town. There is one place that also does Indian food and a dedicated Indian restaurant just on the verge of opening so things are becoming a shade more cosmopolitan.

Yes, you're in a smaller town. I hope you enjoy the new Indian place. I bet the air is clean there....unlike Saigon.

As for rents the script here seems to be once an agreement is signed that is the agreed rent period. We've had people here in rented accommodation for nearly two years and only one has moved house due to increased rent.

Yes, I've been very lucky. This is one of the reason I do not want to move. I will be looking at a minimum increase of 33% for the same place.

[hanno]

Can't complain, though it is hard for the staff. Privately, I live at the hotel and have meals, drinks and laundry taken care of, thus not many overheads. We go out just as much as we used to as dining is still pretty cheap here (too much competition). Business-wise it sure has become a lot more expensive, especially construction materials and transportation.

What hurts me is the cost of plane tickets. Saw yesterday that the ticket price for HCMC - Ha Noi - HCMC went up VND 1,000,000.00 within the past four weeks. That is considerably more than 30%!!!

[PhilHarries]

Can't complain, though it is hard for the staff. Privately, I live at the hotel and have meals, drinks and laundry taken care of, thus not many overheads. We go out just as much as we used to as dining is still pretty cheap here (too much competition). Business-wise it sure has become a lot more expensive, especially construction materials and transportation.

Same here, it's just not economically attractive enough for me to rent a house with all the hassles that entails. Hotel works out $22 per night for which I get cable TV, Internet access, free laundry, breakfast, access to swimming pool and use of a small gym.

What hurts me is the cost of plane tickets. Saw yesterday that the ticket price for HCMC - Ha Noi - HCMC went up VND 1,000,000.00 within the past four weeks. That is considerably more than 30%!!!

PB Air Da Nang to Bangkok return in February was (prices in round terms) $325, by March they were quoting $425, in May I was quoted $525 and our construction manager was stung fo nearly $700! I think they have reduced the prices recently but they are still sky high.

In May I declined and flew DAD-SGN-BKK return for $180 but last time, August, this was $350.

Bluddy good job we get a reasonable flight allowance for our R&R's but I am convinced some airlines at least are using the rise in oil price as an excuse to make hay whaile the sun shines big time.

[hanno]

Bluddy good job we get a reasonable flight allowance for our R&R's but I am convinced some airlines at least are using the rise in oil price as an excuse to make hay whaile the sun shines big time.

No kidding, it is a huge rip-off that cannot be explained just by the increase in petrol prices. And I don't get a flight allowance But then I do stay free at the hotel I work at.

[Wrong Turn]

Can't complain, though it is hard for the staff. Privately, I live at the hotel and have meals, drinks and laundry taken care of, thus not many overheads. We go out just as much as we used to as dining is still pretty cheap here (too much competition). Business-wise it sure has become a lot more expensive, especially construction materials and transportation.

What hurts me is the cost of plane tickets. Saw yesterday that the ticket price for HCMC - Ha Noi - HCMC went up VND 1,000,000.00 within the past four weeks. That is considerably more than 30%!!!

I have been thinking about this also. There have been some local media reports about gouging, although these accusations or suspicions on gouging have been on lessor industries, and not the airlines.

It's a trickle effect. People IMO, both local and foreign are cutting back on spending, or at least being more careful on where and what we spend on. I am.