Experts have high hopes for inflation scenarios

Illustrative photo. (Source: VOV)

According to the General Statistic Office of Vietnam, consumer price index (CPI) for the first half of the year upped by 2.64 per cent, the lowest rate seen during the past three years and at an inconsiderable high against with the inflation ratio of 1.87 per cent seen during the six-month period.

The CPI indicator would facilitate the implementation of macro-economic stability and inflation control.

The Government’s Steering Committee on Price Management has sketched out two scenarios for the inflation rate during the remainder of the year, which is predicted to stretch between 3.17 to 3.41 per cent.

Nguyen Ba Minh, head of the Economics and Finance Institute under the Academy of Finance, said food prices are set to soar during the remaining months of the year, while the price of pork could skyrocket due to supply shortages stricken by the ongoing African swine fever.

The monthly basic salary for civil servants, public employees, and those working in the armed forces rose from VND1.39 million (US$59.77) to VND1.49 million (US$64.07) as of July 1. This puts additional pressures on CPI. Another threat to CPI comes from the increasing prices of materials worldwide.

However, the continued sluggish export of farm produce along with its subsequent slowdown in domestic consumption would help narrow CPI growth, Minh noted.

A wide range of measures could be taken to stabilize commodity prices, regulate the monetary policy for macro-economic stability, and curb inflation; all of which would aid in the control of CPI growth, the expert added.

Ngo Tri Long, former head of the Price and Market Research Institute under the Ministry of Finance, said that in order to curb CPI within the projected limit of 4 per cent for this year, more efforts should be exerted to tighten controls on inflation and ensure the effective implementation of macro-economic stability goals.

Inflation control should keep up with market rules instead of following rigid administrative decisions. The price adjustment of an essential commodity must be scrutinized to minimize spillover effects on other goods, Long noted.

The prices of petrol and oil in particular must be adjusted in line with the national petroleum price stabilization fund and its proper scenarios outlined in response to price hikes.

A closer watch should be made into the price of construction materials and properties along with the supply, demand, and price of properties in major urban areas, in order to put forth measures on stabilizing the domestic market.