It expected Vietnam’s inflation at 3.7 percent in the latest report, up 0.7 percentage point compared to the previous forecast published February.

However, Vietnam’s inflation is unlikely to be a big concern this year as it will likely remain well below the 4 percent inflation target of the State Bank of Vietnam, the lender said.

Compared to rising inflation in parts of Southeast Asia, Vietnam’s inflationary risk is among the lower end of the group, it added.

According to the General Statistic Office, the four-month consumer price index rose by 2.1 percent compared to 0.89 percent over the same period last year.

Transport and food, two categories used in calculating CPI, fell in April thanks to declining oil and domestic agriculture product prices between March and April.

Education and housing & construction material rose, mirroring higher tuition fees after a period of Covid-19 discounts and rising rent prices after workers return to cities.

But the bank also warned of possible trade downturn from volatility of the US and China markets.

With Covid-19 gradually brought under control, high consumer demand in the U.S. could shift from goods to services in 2022, affecting Vietnam’s exports.

Exports are also forecasted to feel more rumble from China’s Covid-19 lockdown in major cities, it added, as China accounted for 30 percent of export share.

"Securing raw materials amid China’s lockdowns is a major concern for local manufacturers", HSBC reported.

Source: VNE