Inflation forecast to be under control in 2022

A worker checking fabric at a company in the northern province of Nam Định. Global raw material prices are forecast not to increase significantly in 2022. VNA/VNS Photo

Though there will be pressure on inflation in 2022, experts forecast it will remain under control and the National Assembly's target of 4 per cent target is still feasible.

At a seminar on market and pricing held in Hà Nôi on Tuesday, the director of the Institute of Economics and Finance Nguyễn Bá Minh forecast the average consumer price index (CPI) in 2022 will increase roughly 2-3 per cent compared to 2021.

According to Minh, inflation in 2022 will be well controlled as it will be difficult for global raw material prices to increase significantly due to the complicated spread of new variant Omicron, trade wars and political conflicts in the world.

Purchasing power in the domestic market will be still weak because the income of workers has been reduced, as production stagnated during the pandemic.

Minh forecast gasoline prices to be stable at US$65-80 per barrel.

He explained if the oil price increases sharply, the US will increase the supply of shale oil. At that time, the US will gain the oil market share of OPEC and OPEC + countries, meaning the latter will then have to increase the supply to cause oil prices to fall again.

Discussing pork prices in 2022, Minh said the domestic supply of pork is quite abundant. The product’s price has decreased sharply compared to December 2020 and will also be stable at VNĐ45,000-60,000 per kg until the end of 2022.

Expert Nguyễn Đức Độ also agreed that CPI in 2022 will remain at a low level. Though the economy is recovering, the output of 2022 will still be below potential. If Việt Nam’s GDP in 2022 grows by 6.5 per cent, the Government’s target, or even 8-9 per cent as some forecast, the average GDP growth rate in the 2020-22 period is only at 4-5 per cent, much lower than 6 per cent in the 2011-20 period, he explained.

However, experts said controlling inflation in 2022 will not be easy as the index can increase quite high from the beginning of this year, in the wake of the global economic recovery and commodity prices on an upward trend.

The economic recovery in 2022, under the impacts of economic development support packages, will cause consumption and investment demands to increase, putting pressure on prices.

Experts suggested pandemic prevention will provide the prerequisite for production and market stability to keep CPI under 4 per cent this year, as set by the National Assembly.

According to economist Ngô Trí Long, the authorities should closely monitor supply and demand sources in the domestic market, especially before Lunar New Year, to take appropriate measures to control prices.

At the event, representatives from the Ministry of Finance’s Price Management Department said the department will closely monitor the world’s economic developments and inflation, promptly taking effective action in managing domestic production and balancing local supply and demand in a move to successfully control inflation right from the first months of 2022. — VNS