"Drawing" both difficulties and advantages to have the suitable price management scenario

Mr. Nguyen Anh Tuan, Director of Price Management Department, Ministry of Finance

In the difficult economic context due to objective factors, by 2020, Vietnam succeeded in controlling inflation in accordance with the target set by the National Assembly. Could you tell us about this work in the past year?

We can see inflation control is completely in the Government's forecast and operating scenarios from the beginning of the year. The inflation chart shows the beginning of the year was very high at 6.43%. Through the Government's operating efforts, inflation gradually pulled back to 4% and reached 3.23% on average by 2020.

For this result, the management and administration work were very important. The former Head of the Price Steering Committee, former Deputy Prime Minister Vuong Dinh Hue and Prime Minister Nguyen Xuan Phuc, actively and drastically directed ministries and branches to implement price stabilization and management according to their functions and tasks.

Price management has both market factor and an executive factor. Regarding price management, the Government has several scenarios for each month, quarter and year. We can see that market movement can increase or decrease, but the executive factor is very important, affecting the control. As in 2020, right from the beginning of the year, the Government issued a message not to regulate electricity prices in the direction of increase, and we did not adjust public services according to the roadmap. These two messages have had a positive impact on price management and inflation control for the whole year 2020.

For example, following the direction of the Prime Minister, Vietnam Electricity has decided to reduce the price twice in 2020, that is, in the second quarter and the fourth quarter of 2020. Thereby, it has contributed to stabilising prices, solving difficulties for production and business.

Or for domestic water, the Prime Minister has instructed ministries, branches and localities to implement regulation plans to reduce prices for some people affected by the Covid-19 pandemic. This is a positive signal, helping people as well as objectives impacted by the pandemic to decrease difficulties.

In 2021, it is forecast that there will be many difficulties and challenges for the economy. With inflation control and price management, which factors do you think will affect this work?

In 2021, several factors adversely affecting the price situation such as the group of fuel and petroleum products are very complex, there are factors of increase and decrease, but changes are so abnormal we cannot predict all. We forecast that gasoline will tend to increase this year.

For essential commodities, including pork, it is also very concerning if we cannot control the disease well.

In addition, natural disasters, storms and floods were complex, affecting the supply as well as affecting the market. In addition, the price management of some goods by State continues to follow the roadmap such as public services (health, education). All are pressures on price management in 2021.

Another important factor is that in 2021, the forecast for the Covid-19 pandemic is still very complex, so it is necessary to continue to remove difficulties for enterprises. Only promoting production and business can regulate supply and demand, controlling inflation well.

With the standing role of the Prime Minister's Steering Committee for Price Management, what will the Ministry of Finance take measures to continue to ensure the set goals?

By 2021, we must forecast (both difficult and favourable) to have appropriate measures and operating scenarios. I believe the operating experience of the previous year - the Government has successfully controlled inflation for five years in a row - will be the premise to continue controlling inflation in 2021 and beyond.

Therefore, the Ministry of Finance recommends ministries and branches continue to closely follow the market price situation for specific management. For example, for petroleum products, the Ministry of Industry and Trade needs to work closely with the Ministry of Finance to control the price of petroleum, taking into account the market factor, and with the Petroleum Price Stabilisation Fund.

For electricity products, it is necessary to carefully evaluate the cost factor affecting the price to consider the impact on electricity prices for an operating scenario. In addition, ministries and branches under functions and tasks need more effort to remove difficulties for production and business.

In particular, with pork, the Ministry of Agriculture and Rural Development must strictly control the pandemic, continue to remove difficulties for production and business, boost supply, and regulate supply and demand to reduce price pressure.

I think the most important thing is to control market prices according to functions and tasks from the central to local levels. Along with that, the communication and propaganda work is also very important, to grasp the market situation as well as the general policies of the Government and the Prime Minister in price control, creating social consensus and avoiding inflation as expectations.