Pressure from inflation control

VCN – The administration and economic development of the country are being saddled with inflationary pressure. The "pocket" of the people is no exception.
Pressure from inflation control
The people's "pockets" is being saddled with the sharp increase of many goods. Photo: T.D

Prices tend to increase

According to the General Statistics Office, the Consumer Price Index (CPI) in May 2022 increased by 0.38% on the previous month, by 2.48% compared to December 2021, and by 2.86% over the same period last year. Notably, among the 11 main groups of consumer goods and services, 10 groups of goods increased in price compared to the previous month, only one group decreased.

It can be easily seen that the price increase of domestic gasoline is following world prices; the increase in the price of food, foodstuffs, and the price of essential consumer goods and services which is in line with the price of input materials are the main reasons for the increase in the CPI.

As observed by a reporter, the price level of basic commodities such as food and service prices are skyrocketing. At a restaurant in Hoang Mai district (Hanoi), from the middle of May, there was a sign of a price increase of about 20% per dish. According to Mr. Vu Viet (restaurant owner), he knew that if he increased the price, he would take risk of losing a number of customers. In the situation that the prices of vegetables, meat as well as spices, salt, and fish sauce have increased. If he did not increase the price, he would inevitably suffer a loss.

As for consumers, the fact that the price of most items is increasing has become an obsession. Mrs. Thuy Ngoc (Cau Giay, Hanoi) is a public servant with an average monthly income of less than VND10 million. Ngoc shared that, with this salary, if she spent like before, her family's spending fund would be "overburdened" due to escalating prices.

"This fact makes my family have to find ways to cut spending, find more "left-hand" jobs to have more income," Ngoc said.

Focusing on the core solution

Rising CPI is creating concerns about inflation control. According to Minister of Finance Ho Duc Phoc at the question-and-answer session on financial issues on June 8 in the hall of the 3rd session of the 15th National Assembly, the inflation in the US is currently at 8.3%, inflation in Europe is 8%, Singapore is 5.4%, South Korea is 4.8% and Thailand is also 4.6%.

Meanwhile, the inflation index in our country is currently is 2.25% (the target set by the National Assembly for the whole year 2022 is less than 4%). Although this is a quite positive number in the current context, there will also be many challenges and difficulties.

Vietnam's economic annual report 2022, conducted by a group of authors from the Institute for Economic and Policy Research (VEPR), forecasted that Vietnam's inflation in 2022 was expected to be in the range of 4 to 4.5%. VEPR presented a series of strong impact factors from the supply chain such as supply shortage, sudden increase in aggregate demand; labor shortage; petrol prices, and electricity prices are forecasted to increase due to increased production and consumption demand in the future, while food prices increase in line with world prices due to supply chain disruptions; consumer demand at the end of the year increased and region's minimum wage increased.

However, the report also said that policies on reducing taxes, fees and charges have helped reduce pressure on the price level. In particular, the flexible exchange rate policy, keeping the VND relatively stable once again helped reduce import pressure on inflation.

Moreover, talking about inflation, Minister of Finance Ho Duc Phoc said that, besides the objective factors that are having a negative impact on inflation control, it was fortunate that our country had self-control over food and food products - items account for 40% of total goods. This is a golden time for our country to make a breakthrough in the development of domestic production and consumption. If the country takes advantage of this opportunity to create and develop, we would surely turn up because the inflation pressure in other countries was very high.

Many experts recommended that, in order to control inflation, the most important thing was that monetary policy needed to maintain a status of "adaptation" to the current state of the economy, continuing to balance between inflation and financial risks with support for economic recovery, clearing the capital flow. In addition, it is necessary to continue promoting the development of the bond and stock market, but it needs to publicize information and transactions and promote the professionalism of market participants. At the same time, it is necessary to manage inflation expectations as well, prepare contingency measures and act quickly if the risks of expected inflation gradually increase. Furthermore, clearly communicate the scenario, roadmap, and action conditions to the public, ensuring not to forget the goal of maintaining price stability and protecting the reputation of the State Bank's policies.

In the coming time, the Ministry of Finance will continue to control core inflation in 2022 to create a basis for general inflation control; continue to closely monitor the world economic situation and inflation, price movements of fuels and strategic materials, and step up the work of synthesis, analysis, forecast, develop in advance the scenarios and response plans for each item in the event that goods on the world market continue to increase, to manage domestic production, balance and control supply and demand, and stabilize prices appropriately.

Another important solution highlighted by the Minister of Finance is to promote the development of enterprises, promote the development of business households and ensure social security, restructure the economy, and make breakthroughs in infrastructure and digital transformation. According to Minister Ho Duc Phoc, the core of the economy is not only fiscal and monetary policies, as those policies must be directed at businesses and people. People and businesses operate their business effectively, have incomes, increase GDP, increase budget payments, create jobs and improve their lives, it will help maintain the fiscal and monetary policy, including stock market policy.

“Therefore, it is necessary to prepare all the best conditions for administrative procedures as well as digital transformation infrastructure and scientific and technical advances for businesses and people to produce and operate the business effectively. This is the fundamental solution to fight inflation in the best way," Minister Ho Duc Phoc said.

By Thùy Linh/Thanh Thuy

Related News

The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

VCN - The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more; the average growth rate of the consumer price index (CPI) to about 4.5-5%.
Vietnam gears up for potential inflation impact in 2025

Vietnam gears up for potential inflation impact in 2025

VCN - For sound price management and inflation control, Deputy Prime Minister Ho Duc Phoc directed officials to vigilantly track both domestic and international market dynamics. The goal is to proactively develop flexible strategies and solutions, enabling a swift response to any emerging challenges.
Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3.92%.
Prime Minister

Prime Minister's telegram promoting growth, controlling inflation, and stabilizing the macroeconomy in July and the third quarter of 2024

VCN - Prime Minister Pham Minh Chinh has just signed and issued Official Dispatch No. 71/CD-TTg dated July 21, 2024 on key tasks and solutions to promote growth, control inflation, and stabilize the macro economy in July and the third quarter of 2024.
Comment

Latest News

Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units with large asset scale and large number of inventory items, complex assets, and slow implementation progress.

More News

Fiscal, monetary policies support demand stimulation, price stabilisation

Fiscal, monetary policies support demand stimulation, price stabilisation

These efforts, in conjunction with the implementation of monetary policies and other macroeconomic policies, aim to solve difficulties for businesses and the public, stabilise the macroeconomy, control inflation, ensure the balance of the economy, promote economic growth, and secure social welfare and people’s livelihoods.
Vietnam secures VND 157 billion from state enterprise divestment in 2024

Vietnam secures VND 157 billion from state enterprise divestment in 2024

VCN - The Ministry of Finance reported that in 2024, the divestment of state capital in 5 enterprises (F1) generated VND 157 billion from an initial value of VND 145 billion
VN’s credit conditions in 2025 expected to be stable

VN’s credit conditions in 2025 expected to be stable

The credit conditions for Việt Nam will stabilise in 2025, after improving substantially over the past year, the rating agency VIS is forcasts.
State revenue in first month of the year equal to 14% of the estimate

State revenue in first month of the year equal to 14% of the estimate

VCN - According to the Ministry of Finance, in January - the first month of 2025, the total state budget revenue is estimated at VND275.9 trillion, equal to 14% of the estimate; meanwhile, the total state budget expenditure is estimated at VND134.4 trillion.
Securities 2025 expects a breakthrough in scale and quality

Securities 2025 expects a breakthrough in scale and quality

VCN – The positive factors inherent in the macro economy and the Vietnamese stock market will continue to create the foundation for the market to maintain stability, good liquidity, and growth in both scale and quality in the new year of At Ty 2025, Chairwoman of the State Securities Commission Vu Thi Chan Phuong said.
Cash reserves in stock accounts at six-quarter low amid margin rise

Cash reserves in stock accounts at six-quarter low amid margin rise

These funds are readily available in investor accounts, but remained undeployed as of the year-end.
Five solutions for developing stock market in 2025

Five solutions for developing stock market in 2025

VCN - On February 5, 2025, at the Gong-beating ceremony to open the stock trading at the Ho Chi Minh City Stock Exchange (HOSE), Deputy Minister of Finance Nguyen Duc Chi introduced five solutions for comprehensive development of the stock market.
Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

VCN- On February 3, the first working day after the Tet holiday, Minister of Finance Nguyen Van Thang and the delegation visited and worked with the General Department of Vietnam Customs (GDVC).
The stock market after Tết 2025 presents both challenges and opportunities

The stock market after Tết 2025 presents both challenges and opportunities

Việt Nam’s stock market following the 2025 Lunar New Year (Tết Nguyên Đán) presents a complex landscape of risks and potential gains, driven by foreign capital inflows, economic resilience, and looming corporate bond maturity pressures, according to one securities expert.
Read More

Your care

The system has not recorded your reading habits.

Please Login/Register so that the system can provide articles according to your reading needs.

Latest Most read
Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more
Mobile Version