Managing price effectively, reducing pressure on inflation

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Abundant supply of goods helps the market always be stable. Photo: Collected

CPI growth rate is moderate

Recent figures from the Ministry of Finance and the General Statistics Office (Ministry of Planning and Investment) both show that the CPI growth rate in the first eight months of the year was moderate, controlled below the Government's target of 4.5%. In particular, the CPI in August was stable compared to the previous month and increased by 3.45% over the same period last year, marking the lowest growth since March 2024. In September 2024, the price market in the northern cities and provinces was affected and severely damaged by typhoon No. 3 and the circulation after the storm, which also raised concerns that it would affect price management and inflation control in the last months of 2024.

According to the report of the Ministry of Finance after storm No. 3, there was a shortage of some items such as vegetables, fruits, food, drinks, etc., causing price increases in some areas, leading to difficulties for people's daily life and consumption. However, up to now, the supply of goods has been circulating again, especially after drastic management and direction solutions to increase supply by the Government and ministries, central agencies, including the Ministry of Finance.

The People's Committees of provinces such as Lao Cai, Yen Bai, Quang Ninh, and Hai Phong have all sent documents to their affiliated units to promptly grasp market price developments as well as strengthen price management, stabilize the market in the area, and strictly handle acts of abusing natural disasters to unreasonably increase prices for profit.

Commenting on this issue, Dr. Nguyen Duc Do, Deputy Director of the Institute of Economics and Finance (Academy of Finance), said that the impact of storm No. 3 on the prices of goods in the market is mainly short-term and localized in some areas. Vietnam has a fairly large food reserve, so when the transportation system is repaired and reconnected, the supply recovers.

Sharing the same view, according to economic expert Associate Professor, Dr. Dinh Trong Thinh, the directions of the Prime Minister as well as the Ministry of Finance as the standing agency of the Price Management Steering Committee are very timely, sensitive, and decisive, thereby stabilizing people's lives, ensuring social security after storms and floods, and resolving possible bottlenecks in the distribution of goods to cities and provinces. This solution needs to continue in the rest of 2024 to keep inflation below 4%.

Ensuring the set target

There are only 3 months left until the end of 2024. According to experts and many international organizations, Vietnam's inflation is forecast to remain below 4% for the whole year of 2024. Although there are many factors that can affect domestic inflation control, the recent loosening of monetary policy by the US Federal Reserve (Fed) is expected to help reduce some pressure on inflation.

The Ministry of Finance said it is coordinating with ministries, central and local agencies to closely monitor market price developments of essential goods. Ministries, central and local agencies, according to their scope and management sectors and fields, and local People's Committees will also strengthen inspection and examination of compliance with price laws and strictly handle violations of price laws.

In a recent talk, Mr. Pham Van Binh, Deputy Director of the Price Management Department, Ministry of Finance, said that cities and provinces need to create conditions for goods circulation. Provinces also need to do a good job of synthesizing information, forecasting local market prices and coordinating with the Ministry of Finance as well as ministries and competent agencies to have appropriate response solutions. With these efforts, Mr. Binh affirmed that the inflation control for the whole year of 2024 will achieve the target set by the National Assembly and the Government.

Agreeing with the above forecast, Associate Professor, Dr. Dinh Trong Thinh said that with the scenario of a better world economy, higher growth, lower interest rates and inflation, the value of the Vietnamese Dong will have maintained, the macro balance will be ensured, production and export as well as domestic consumption will be boosted, and the economy is expected to grow by 6.3-7%, inflation at 3.5-3.8%.

Dr. Nguyen Duc Do also commented that the policy that will have a quick and strong impact on inflation in the coming time is the adjustment of prices of goods managed by the State. If state management agencies do not make adjustments to electricity prices, health care and education services, the average inflation in 2024 will be around 3.5%. However, if adjustments are made, management agencies need to make reasonable calculations so that inflation and market prices remain at the set levels.

Previously, on this issue, the Government, the Price Management Steering Committee and the Ministry of Finance have repeatedly requested ministries, central and local agencies to prepare and carefully calculate plans to manage prices of State-priced goods and public services according to the market roadmap to avoid resonance effects on the CPI.