High increase of CPI due to market factors

	Vietnam’s CPI up 0.55% in May
	The Government ensures to revise the CPI up by 4%
	Stabilize inflation 2018: Needs contributions from the ministries

Mr. Nguyen Anh Tuan

Mr. Nguyen Anh Tuan, Director of Price Management Department of Ministry of Finance, Team Leader of the Steering Committee on Price Management of the Prime Minister talked to Customs Newspaper on this issue.

CPI in May is accessed to relatively high increase, what are the causes, Sir?

Market prices in the first five months fluctuated towards a relatively high increase in the first two months, slightly down in March and gradually increased again in the next two months. The average CPI increased by 3.01% over the same period last year.

The causes of CPI increase in April and May of 2018 do not mostly include new price increase factors that have come from the Government’s price control, but are mainly due to the market factors such as: Price of some kinds of fuel, especially world petroleum price continues to increase at a higher rate than expected, leading to upward revision of the price in the country; the food price increase is due to increased demand for rice exports; Pork price tends to recover as the total number of pigs decreased and many pig producers operate in small scale and have not yet re-produced, the current price of live pig is double compared to the same period last year; Gas price increase in line with world prices. At the same time, the factors that helped control CPI growth have not changed much from the beginning of the year.

With such an increase, can we ensure inflation control of less than 4% as targeted in the beginning of the year?

In fact, over the past 5 months, ministries, sectors and localities have coordinated and made efforts to control market price and taken measures to control inflation effectively. The Government has also expressed its determination to control the average CPI below 4% as the target assigned by the National Assembly to ensure economic balance and support growth and not to incur expected inflation.

However, it is not denied that the market still has potential negative factors which are the main causes impacting on the inflation control target. These factors are the pressure of increasing prices of some raw materials in the world market affecting the domestic market through imports, notably the recent complex fluctuations in prices of petroleum products. In addition, the consequences of natural disasters and epidemics can take place complicatedly and unpredictably.

With the experience of adjusting prices in 2017, in order to control CPI in 2018, it needs to focus on the predictions, development of detailed price control scenarios for each item managed by the State with careful steps and appropriate roadmaps to ensure not to suddenly affect the general price level.

Besides, implementing effectively and synchronously the supply and demand balance of essential commodities from the beginning of the year, preparing well goods sources to meet consumer demand (including consumption for production and life) in all situations, all regions and all periods of the year.

In the coming time, what are the measures taken by management agencies to effectively control the increase of price?

In fact, the CPI control in June plays an important role in controlling the price level in this year due to the greater impact on average CPI than in the next months.

At the meeting of Steering Committee on Price Management on 29th May, Head of the Steering Committee, Deputy Prime Minister Vuong Dinh Hue talked about urgent requirements for each ministry, sector to ensure inflation control.

Specifically, the Deputy Prime Minister requested the Ministry of Agriculture and Rural Development to update information, review and grasp the number of sows, pigs and the ability to supply pigs in areas from now to the end of 2018; Notify to the Steering Committee to have appropriate measures for coordination and prevent the partial shortage that highly increases price which creates general negative effects and affects the consumers’ interests; Continue to strengthen the negation and expansion of official export markets for agricultural products. Taking measures to promote consumption of sugar and preventing huge volume in stocks. Maintaining Vietnam’s rice export value.

The Ministry of Industry and Trade needs to collaborate with the Ministry of Finance to harmoniously manage the price of petroleum products in the country and reasonably use the price stabilization funds, take initiative in providing scenarios to cope if the price of petroleum products increases highly to facilitate the price control in the whole year. The Deputy Minister noted that if the price of petroleum products sharply increase, the adjustment of the price stabilization fund will be increased to limit the price increase.

Regarding the price of medical services, Deputy Minister requested the Ministry of Health to urgently complete the Circular amending Circular 37/2015/TTLT-BYT-BTC to apply in July 2018 to reduce price of these services. Drastically implementing in bidding medicine with more frequency and early piloting in bidding of medical supplies.

The State Bank of Vietnam (SBV) continues to control core inflation stably and control money supply reasonably, especially in capital withdrawal transactions at enterprises.

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For education, the Ministry of Education needs to issue soon the revised Circular No. 55/2011/TT-BDDT dated November 22th, November 2011, promulgating regulations on the Pupil’s Parent Representative Board, develop a plan to control the price of school materials in the new school year and overcome the over-collection in the school.

The Ministry of Construction needs to introduce solutions to ensure the supply to meet the high demand for materials for construction, actively study and develop solutions to use materials to replace sand for ground leveling.

The Ministry of Information and Communication needs to actively coordinate with other ministries and sectors to promote communication. Ministries and sectors need to take the initiative in providing information to press agencies to control expected inflation; publicize the price management, enhance the monitoring of input costs of products, especially for essential goods.

Following the direction of the Deputy Prime Minister, the Ministry of Finance continues to attach great importance to performing the tasks assigned to the State management on prices, stick to the practical situation and coordinate well with the ministries, sectors and localities in the price control of some key commodities, actively cooperate with other units such as the State Bank of Vietnam, the Ministry of Planning and Investment in forecasting and developing monthly, quarterly, and yearly price index scenarios, and in the long term to promptly report to the Government, Head of the Steering Committee on Price Management for appropriate measures.

Thank you, Sir!