Inflationary pressure to begin from early 2022

	Carrying out price administration in careful, flexible and proactive manners
	Leading the way to economic recovery but banks should not be put at risk
	High inflationary pressure in 2022

The conference on market developments and prices in 2021 and forecasts for 2022. Photo: Thuy Linh

Impressive results in price management

Assoc. Prof. Dr. Truong Thi Thuy, Deputy Director of the Academy of Finance, said timely policies and solutions of the Party and State have greatly contributed to creating a positive change in the country's economic development in 2021.

Accordingly, GDP is estimated to rise by 2.58% year-on-year; the Consumer Price Index (CPI) 1.84% year-on-year and the core inflation 0.81% year-on-year.

At the conference, Assoc. Prof. Dr. Nguyen Ba Minh, Director of the Institute of Economics - Finance, said the CPI hike in 2021 was driven by the increase in prices of some items such as petrol and oil; rice; housing maintenance materials; education services and food.

However, the fall in food prices, Government’s support packages to those who have been affected by the Covid-19 pandemic and the decrease in travel and tourism demand are causes that restrained the CPI growth rate in 2021.

In addition, agencies at all levels have actively implemented comprehensive solutions to prevent the Covid-19 pandemic and stabilize prices in accordance with the Government’s direction.

Deputy Head of Policy Department, Price Management Department, Ministry of Finance, Nguyen Xuan Dinh said the 1.84% increase in the 2021 CPI is thanks to the Government's price management amid the Covid-19 pandemic.

"Building an appropriate price management scenario plays an important role in the orientation and implementation of fiscal policies in effective coordination with monetary, trade policies and other macroeconomic policies towards the goal of recovery in the new normal state of safe and flexible adaptation to Covid-19.

“Regarding price management of a number of necessities, the ministries and agencies have actively offered solutions to remove difficulties for businesses and people in accordance with the price management scenario designed from the beginning of the year," said Dinh.

Inflationary pressure in 2022 is assessed as very high

According to the Price Management Department, in 2022, besides the impact from world market movements, the domestic inflationary pressure also comes from the continued upward revision of prices of some public services according to the market roadmap and increased input costs of some products.

Moreover, the upturn of global fuel prices (petroleum, LPG) on the world market when demand of countries remains high in the process of economic recovery as well as fuel shortages from the end of 2021 is a factor behind inflationary pressure.

In particular, the Covid-19 pandemic has seen complicated developments, affecting the cost of transportation of goods globally, raising prices of imported and exported goods; and natural disasters and adverse weather may increase prices of some commodities in 2022.

"From the beginning of the year, inflationary pressure is assessed as very high, especially in the Lunar New Year in 2022, the CPI in January and February may be high according to the law when consumer demand is high during the Tet holiday," said Mr. Nguyen Tat Dinh.

Economist Nguyen Duc Do said the inflation is likely to remain low, because the economy is recovering, but output in 2022 will remain below its potential level. If GDP in 2022 only grows by 6.5% as per the target, or even 8-9% as some forecast, the average economic growth rate of the 2020-2022 period is only at 4-5%, much lower than 6% in the 2011-2020 period.

"Inflationary pressure in Vietnam in 2022, if any, will come from the current low pork price. Moreover, the Government may adjust the prices of some items such as electricity, water, and service prices, which will also put pressure on inflation," said Mr. Nguyen Duc Do.

Facing that situation, the Minister of Finance issued Directive 02/CT-BTC dated November 25, 2021 on strengthening price management and stabilization during the Lunar New Year 2022; requesting the whole sector strengthen price management from the first months of the year to create momentum for the whole of 2022.

At the same time, the Ministry of Finance has submitted to the Prime Minister, Deputy Prime Minister - Head of the Price Management Steering Committee solutions and key tasks in 2022 to control inflation, stabilize the macro-economy, and create favorable conditions for socio-economic development in the post-pandemic situation.

Economist Ngo Tri Long also suggested that ministries and agencies should continue to manage gasoline prices flexibly, ensuring that domestic gasoline prices closely follow the movements of the world’s finished petroleum products.

Ministries and agencies should closely monitor the situation of supply and demand, especially at the end of the year and the Lunar New Year to take appropriate measures to regulate supply and demand, to avoid price surges.

At the same time, it is also necessary to strengthen the inspection and supervision of price declaration and listing and the sale of tickets in accordance with the listed prices for transport businesses, especially during the Lunar New Year.

Inflationary pressure still present: GSO official The average consumer price index (CPI) in the first four months of this year inched up 0.89 ...

Expert Ngo Tri Long said it is necessary to strengthen communication on inflation and price fluctuations to contribute to stabilizing consumer psychology, avoiding hoarding, virtual price increases and reducing inflation expectations, and enhance inspection and supervision to minimize the situation of traders and sellers taking advantage of the Lunar New Year to push up prices.