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because of investment. Investment growth rates in recent years were resulted from cash inflows of FDI into Vietnam. But with the credit crisis and global economic recession, capital flows were affected severely.

Those were some obstacles which occurred in a few years ago. As compared to other Asian countries, the economy of Vietnam had already recovered and improved much faster in overall of GDP performance by the end of 2009. And now we are in the process of developing the economy for 2010 and the years following. “Vietnam’s GDP growth rate is forecast to be around 6.5 % and 6.8 % in 2010 and 2011”, according to Asian Development Bank (ADB) in its latest report (2010). And the first signal of increasing GDP was exposed in the first quarter of 2010, according to Ministry of Planning and Investment(2010): “The GDP growth rate in the first quarter of 2010 increased 5.83%, which was higher than for the same period in 2009”.

As a result, it is believed that the GDP of Vietnam increasing in next few months could be feasible. And we hope that the efforts of improving GDP rates of Vietnam will never stop in the coming years.

2.2 CPI of Vietnam

2.2.1 CPI definition

CPI is the acronym for Consumer Price Index which is a measure the level of inflation. It measures change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation, over a given time period. And the CPI published monthly is also called the cost-of-living index.

2.2.2 CPI rates

The chart above shows what happened to CPI in each month of 2009, we can see that the consumer price index increased to 1.38 %, the highest percent during the year. Inflation rate is a key driver leading to a high CPI rate. In 2008, there was a huge impact of inflation on consumer prices; CPI was 22%. However, this number was no longer repeated in 2009 because the government devoted more efforts to bring down the inflation level; as a result the CPI rate was 6.9% and much lower than the previous year.

So, the CPI rate is largely dependent on the inflation rate. From that, we can have a deeper understanding of how the trend of CPI flows by analyzing the inflation rate. And an increasing inflation rate or CPI rate can be caused by some of following reasons:

The factor which created the base of increasing CPI in 2009 was to increase fuel prices from 30 August. ( General Statistics Office)

A variety of prices of construction materials increased over the year. Other factors pushing the price were higher price for some essential goods or services, such as: medicine, food, transportation, electricity, water and so on.

Higher gasoline prices have also contributed to the increasing CPI rate.

From the above reasons will form a picture of the variation of cost of living since then to help financial professionals recognize the potential for inflation to be at risk as a decline in the economy? So, one of the top priorities Vietnam has now is to manage to keep inflation rates within a special range or targeted level. According to ADB (Asian Development Bank) report (2009): “the inflation rate in Viet Nam in 2010 is forecasted to be around 10%”, and the government is applying a tight monetary policy to keep the inflation on target which is lower than 7%. Here are some current typical methods be