Vietnam is suffering from high inflation at the beginning of 2011, after Tet - the Vietnamese Traditional Lunar New Year. The World Bank forecasts Vietnam to have 9.5% inflation in 2011 while the Asian Development Bank (ADB) forecasts the inflation of 13.3% for Vietnam in 2011. The ADB also forecasts inflation in Vietnam will peak in Q3 which may reach 16% and will be lower in the months after. There were major increases in Vietnam in prices in Vietnam in Q1 alone: electricity increased by 15.3% and petrol prices creased by 30%.
The increases in input costs pushed the transport companies, the airlines, travel agencies and tour operators in Vietnam to raise prices and lower profit margins. Vietnam Airlines seek approval from Vietnam Ministry of Finance for a 20-27% increase in airfare and was approved a maximal increase of 23%. The approval came on 22-April-2011 and to take effect from 27-April-2011. HCMC Tourism Association is seeking tax incentive from the government for local travel businesses. According to Paradissa, a Vietnam-based tour operator, tour prices are to increase by 10% on average to cope with rising prices.
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