Hanoi - Vietnam's once-sizzling inflation rate slowed for the second straight month in October, but Vietnamese economists said Monday the government should not yet declare victory.

"I am not reassured by the low inflation figure from October, because it doesn't prove that the government's tight monetary policy has succeeded," said Tran Duc Nguyen, an economist and informal government adviser.

Vietnam's consumer price index fell 0.2 per cent in October after rising 0.2 per cent in September. The figures bolstered a trend that has seen inflation fall since hitting a month-on-month high of 3.9 percent in May.

Overall, prices have risen 26.7 per cent since last October.

And economists said the slowing inflation might not be due to the government's tight credit policies in recent months, but to lucky external factors.

"The government's tightened credit policy has only brought partial, preliminary success," said Vo Tri Thanh, a senior official at the Central Institute for Economic Management. "Vietnam had good luck in October, as world prices have been falling quite fast."

Experts said the decreases were largely due to lower world commodity and energy prices and domestic fuel price cuts, as well as tightened credit by Vietnamese banks.

Thanh said Vietnam's macroeconomy faces a variety of risks, and stabilizing it should remain the government's top priority. Year-on-year inflation remains high, inflationary pressures still exist, bad debts burden many banks, and the country is running a high balance of payment deficit.

"It will take time to overcome the domestic causes of inflation inside Vietnam," said Nguyen.

Nguyen said the government should tighten credit for state-owned enterprises, but loosen it to the more efficient private sector, but he acknowledged that would be politically difficult.

Consumers continue to feel the pinch of high annual inflation. The Government Statistical Office said Saturday that year-on-year food prices were up 40.6 per cent in October, though down by 0.4 per cent against September.

Prices for housing and construction materials increased 22.8 per cent year-on-year while declining 1.1 per cent month on month.

Prime Minister Nguyen Tan Dung last week told the National Assembly that the annual inflation rate for 2008 would be 24 percent, and said the government aims to bring it below 15 percent next year. (dpa)