Many factors for reducing price pressure in the last 6 months of 2018

Mr. Nguyen Anh Tuan

Dear Sir, what are the considered factors putting an upward pressure on prices for the last months of 2018?

The upward pressures are mainly from market factors such as fluctuations in prices of some materials in the world market, such as petrol and liquefied petroleum gas (LPG); Increasing fluctuation of domestic food prices; Risks from natural disasters, floods and storms that occur complicatedly causing price increases of essential commodities in affected areas. The price adjustment of some commodities has been assessed by the State. In addition, an increase of the USD interest rate by US Federal Reserve would certainly affect interest rates and domestic rates...

So, what are the factors to reduce the pressure on price level, sir?

As I said above, the upside pressure comes mainly from market factors. In fact, there are many factors that reduce the pressure on the price level: In the next few months, domestic demand for fresh food is forecast to be stable and usually decreases in the summer, medicine price is striving to decrease by following the centralized drug procurement plan, the price of some health insurance services decreased from 15/7/2018 is forecasted to reduce the CPI by 0.35%; The cost of voice connections between mobile networks will decrease by 20%, basic inflation is at a low rate...

At the same time, the ministries and localities have actively tried to control market prices and implement effective measures to control inflation. The government has shown its determination to control an average CPI of less than 4% as the National Assembly has assigned, to ensure economic balance and support growth, not to expect inflation.

In the future, what solutions does the Ministry of Finance have to advise the Government on operating price control?

The Ministry of Finance, in general, with roles of state management on price and a permanent Steering Committee office about prices to the Prime Minister, will continue to implement the role of coordinator and actively coordinate with related competent authorities in price control, focus on forecasting and development of price management scenarios to advise the price management of state-managed commodities with careful steps and appropriate roadmaps.

Accordingly, the Ministry of Finance will continue to closely coordinate with other ministries and localities in implementing the Government's policy on controlling inflation, strictly implementing the direction of Deputy Prime Minister Vuong Dinh Hue – Director of the Steering Committee for Price Management in the Announcement No. 259 / TB-BCĐHH dated 30/3/2018, and accelerate the implementation of the tasks assigned in Notice No. 403 / TB-BCĐHHG dated 22/6/2018. The Ministry of Finance shall perform the following basic tasks:

Firstly, to closely monitor the market price movements of essential commodities in order to promptly propose measures to ensure the balance of supply and demand in order to stabilize market prices, especially for market prices. The market tends to increase recently, such as for gasoline, food, pork meat...

Secondly, strict control of price constituents for price stabilization items, items listed in the list of prices; Goods and services with prices set by the State, goods and services procured from the state budget; national reserve goods; Goods, public-utility services, ... to strictly handle violations according to regulations, not to raise prices unreasonably.

Thirdly, for the implementation of the market roadmap for a number of important and essential goods, the Ministry of Finance shall continue to closely coordinate with the ministries, branches and the General Department of Statistics in calculating the level and timing for proper adjustment in order to control the general price level, limiting cost impact to production, consumption and people's lives. Regarding the price of health services, the structure of additional costs in the price depends on the residual inflation in the last months of the year.

Fourthly, in coordinating the petrol price, continue to closely cooperate with the Ministry of Industry and Trade to use reasonably the price stabilization fund with appropriate amounts in order to control price increases and take the initiative to have a scenario for response if the gasoline price increases significantly to create favorable conditions for controlling the price for the year.

Fifthly, for some agricultural commodities that are continuing to increase in the future, continue to coordinate with the Ministry of Agriculture and Rural Development in grasping the market situation and the supply of food in order to make forecasts and calculations of price management scenarios for each period in order to promptly propose appropriate market stabilization measures.

Sixth, continue to improve the legal system on price, which focuses on perfecting the management mechanism and rates for services transferred from the list of charges to management under the price mechanism. To continue to study, review and evaluate the implementation of the Law on Price and guiding documents so as to have the basis to report to the Government on amending the law (if necessary).

In addition, we continue to strengthen the inspection on the compliance of legal provisions on prices, especially for essential consumer goods and services, goods and services on the list of declarations price. Also, strictly handling acts of violation about prices.

Finally, in order for the management and administration of prices to achieve positive results, we continue to focus on enhancing the information, propaganda about price management, publicity of information on prices to control expected inflation; Restricting misleading information to confuse consumers, destabilizing the market.

Thank you so much!