Last month, Vietnam's inflation reached the highest position in Asia at 27%. The prices of everything are rising dramatically, especially basic necessities such as petrol, food and clothing (for example: food prices have increased by 74%). The causes seemed to be the overdose of foreign investments and the technologically backward industry. Furthermore, the overty rate has reduced to 15% from 58% since 1993, but is now likely to increase again. Some workers who led Vietnam's climb out of poverty are suffering from expensive city life and plan to return to their rural homes. People are disappointed because they don't see any effective solution from the government. However, most economists believe that this period is only a temporary increase in growth. Detailed information from the article: "The government increased the price of gasoline by 31% to an all-time high of 19,000 dong ($1.19) per liter (or roughly $4.50 per gallon). Diesel prices and kerosene prices have risen even higher." - "people are cutting back on food, limiting travel, looking for second jobs, delaying major purchases and waiting for the cost of a wedding to drop before getting married." - "rumors of increases price increases have caused panic buying of fuel and rice." - "Vietnam is suffering from the global economic recession and high inflation that has spread to Southeast Asia." - "as the value of the dong declines, people say they are moving their money into dollar bank accounts” Analysis – General type of inflation: runaway Normally, an inflation rate of 1-2% is acceptable for an economy (it usually goes with a growth rate of 3 -5%). Galloping inflation is 10-20% and is starting to get out of control. In this case, Vietnam's inflation rate has currently gradually increased to 27% and does not appear to be stopping yet. It can turn into hyperinflation if the government fails to address the problem. However, since Vietnam has grown by 8% in the last decade, the situation is not that pessimistic.- Cost-push Cause: Cost-push inflation occurs when there is a decrease in aggregate supply . “Vietnam is suffering from the global economic crisis.” recession and the high inflation that has spread to Southeast Asia." The price of fuel, an important resource, has increased worldwide, also increasing the cost of raw materials and transportation. The higher the cost of production, the lower the number of production, which leads to a decrease in aggregate supply.o Demand-pull: Demand-pull inflation occurs when there is an increase in aggregate demand (total demand increases as consumption, investment, government spending, or net exports increase) “rumors of price increases have caused panic buying of fuel and rice.