July 19, 2018 07:10

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Inflation is still under control

15:40 | 10/07/2018

VCN- The ministries, sectors and locality have been implementing measures to stabilize the market and control inflation, especially during Tet holidays and at the times when there are many fluctuations in the market. This is the opinion of many experts at the seminar on Market price changes in Vietnam in the first 6 months. Forecasts for the remainder of 2018 took place at the seminar on July 3 in Hanoi.

inflation is still under control
Conference

Price increase due to market factors

According to the General Statistics Office (GSO), the consumer price index (CPI) in six months increased by an average of 0.37% per month. The inflation over the same period last year in the first half of 2018 also tended to increase from 2.65% at the beginning of the year to a relatively high level of 4.67%.

Commenting on this data, Dr. Nguyen Duc Do, Institute of Economics and Finance, said that the trend of increasing inflation in the last 6 months is not unexpected as it was forecasted at the end of 2017. The reason is in the first 6 months of 2017 where the price of pork had risen sharply, and thus inflation over the same period of 2018 will tend to increase if the price of live hogs continues to rise.

In addition, the price of gasoline increased sharply, and along with the adjustment of prices of health services in the first quarter 2018, these were also reasons for the CPI increasing higher than the forecast at the end of 2017.

Associate Professor Ph. D Ngo Tri Long, an economist, said that inflation in the first six months was high compared to 2017, but there are a series of commodities regulated by the State forcing inflation below 4%. Inflationary pressures in the second half of this year will be larger as world market prices of crude oil and commodities are increasing, as well as exchange rates are tending to rise.

The Price Management Department identified price increases in recent months as having been driven by market factors, while there is virtually no factor of price increases from the Government’s controls.

Monitoring closely the movements of market

Forecasting inflation for the second half year, Mr Nguyen Duc Do said that inflation is likely to reach its peak in July 2018, and then gradually fall below 4% (even below 3%) in the last months of 2018.

"At the end of 2017, the Government has adjusted the prices of health services so that the inflation rate will fall sharply if the prices of health services remain unchanged in the last months of 2018," Mr Do said.

According to the expert, there are two inflationary implications for the last months of 2018 concerning the price of gasoline and pork prices. In case where the prices of oil and pork are still at a high level or continue to increase, the average annual inflation rate will only be from 3.4 to 3.9%." So the target of curbing average inflation below 4% is still within the reach of the Government," said Nguyen Duc Do.

According to the Price Management Department of the Ministry of Finance, in the second half of the year there are many potential adverse factors impacting on controlling inflation, mainly from the market. Therefore, the price management control and inflation control, should be implemented in an active manner, focusing on forecasting and setting up detailed price control scenarios for each commodity item managed by the State with a cautious and appropriate roadmap, ensuring there are no sudden impacts on the general price level.

According to Nguyen Loc An, Deputy Director of the Domestic Market Department (Ministry of Industry and Trade), in the coming time, commodities will be influenced by factors such as the price of fuel and energy commodities developing complicatedly and complexly, hiding the trend of basic salary increases for the beneficiaries of the budget, especially when calculating base salary in relation to the structure of increased medical service costs.

However, due to the decrease in the cost of some medical services, the supply of essential commodities will increase and meet the demand for consumption. Therefore, the market price in general is not changing much.

Mr. Nguyen Loc An also said that to stabilize market prices in the remaining months of the year, the essential goods’ market should be monitored, dealing with arising problems when the market fluctuates. At the same time, we are boosting the consumption of garment groups, household equipment and means of transport. We should have demand stimulus programs.

Especially with petrol prices, economic expert Ngo Chi Long also said that it is necessary to request the Ministry of Industry and Trade to preside over the coordination with the Ministry of Finance to run and use stabilization funds with appropriate and reasonable dosage. If prices increase, create a favorable price point for controlling the level.

Representatives of the Price Management Department said that the management and control of price inflation should be implemented in a proactive manner, focusing on forecasting and setting up detailed price control scenarios for each state commodity item, managing with careful steps and an appropriate roadmap for ensuring there are no sudden impacts on the general price levels.

By Thuylinh/Quynhlan