Reducing pressure on inflation control and price market in 2024

	The picture of inflation control in 2023
	Picture of inflation control in 2023
	Vietnam’s macro-economy stays stable, inflation controlled: official

Workshop on Market and Price Developments in Vietnam and forecasts for 2024.

CPI and inflation will be in a downward trend

Speaking at the Workshop on " Workshop on Market and Price Developments in Vietnam and forecasts for 2024" organized by the Institute of Economics and Finance (Academy of Finance) on January 4, Associate Professor, PhD. Nguyen Manh Thieu, Deputy Director of the Academy of Finance, said that in 2023, many timely and positive solutions were implemented to help Vietnam continue to be an economic bright spot in the region and the world.

In particular, the average consumer price index (CPI) in 2023 rose by 3.25% compared to the index in 2022. This is a higher increase than the average increase of 2015, 2016, 2019 to 2022 but much lower than the index of the remaining years in the period 2008-2023. The average core inflation in 2023 rose by 4.16% compared to the average in 2022.

Therefore, Associate Professor, PhD. Nguyen Manh Thieu believes that it is necessary to more clearly analyze market and price developments in 2023, the basic factors, and the main causes creating the market picture in recent times to have forecasts for 2024.

Therefore, at the workshop, experts made many forecasts about price and market indexes for 2024. In particular, many experts said that the CPI and inflation will likely tend to decrease because Vietnam's economy has not fully recovered, the world economy is growing slowly and may even fall into recession.

Associate Professor, PhD. Vu Duy Nguyen, Director of the Institute of Economics and Finance, forecasts that the average CPI in the first 6 months of 2024 will increase at 3.2%-3.5% year-on-year. The reason is that inflation in countries that are major trading partners of Vietnam such as China, the US, and the EU is trending down to 2% and consumer demand is gradually recovering. Furthermore, prices of oil and some food commodities do not have much risk of surging. At the same time, fiscal and monetary policy easing to support growth is still maintained but not as strong as at the end of 2023. Furthermore, the real estate market has not shown many signs of recovery with measures taken and the Government's inflation control has been strengthened.

Similarly, Dr. Le Quoc Phuong, former Deputy Director of the Center for Industry and Trade Information (Ministry of Industry and Trade), forecasts that the average CPI in 2024 compared to 2023 will increase at 3.6-3.8%.

This expert said that the factor helping to reduce Vietnam's CPI is that inflation in major economies is starting down, world commodity prices are low and unlikely to increase suddenly. Furthermore, Vietnam's macro economy is stable, with abundant supply of goods... helping to create room to restrain price increases.

Closely monitoring market price fluctuations

However, economists also point out many pressures on Vietnam's CPI and inflation. That is, geopolitical tensions in the world have persisted and might spread, thereby pushing up the prices of oil and many other goods. Vietnam’s economy is heavily dependence on raw material imports and has the high openness, so domestic price movements are closely linked to world raw material price movements, which are still high and see unpredictable developments.

On the other hand, in terms of currency, a high USD index can put pressure on foreign exchange rates and also put pressure on inflation. In addition, the domestic market is also under pressure from the increase in basic salary (from July 1, 2024) and moves to increase prices of medical and educational services according to the roadmap.

From the above issues, at the workshop, the representative of the Price Management Department (Ministry of Finance) said that they will synchronously implement solutions and measures to proactively respond to challenges in price management; including focusing on key solutions and tasks in 2024 to control inflation, stabilize the macroeconomy, and create favorable conditions for socio-economic development.

The Price Management Department said they will closely monitor domestic market price fluctuations to advise on appropriate, flexible and timely price management policies and scenarios, especially for essential goods and services which have a great impact on the price level, especially in times of price fluctuations such as holidays, salary policy adjustments. Along with that, the department will operate fiscal policy in close coordination with monetary policy and other macroeconomic policies to contribute to controlling inflation and ensuring major balances of the economy.

The Price Management Department requests ministries, agencies and localities to proactively prepare good price management plans for goods and public services priced by the State according to the roadmap; strengthen inspection and supervision of implementation of measures on price declaration and listing, price information publicizing; check compliance with price laws; and pay attention to information, communication on prices to control expected inflation.

The economists recommend that it is necessary to ensure balance between supply and demand, stabilize the market, and pay special attention to forecasting, analysis, and building appropriate price management scenarios. Economic expert - Associate Professor, PhD. Ngo Tri Long noted the need of making good use of free trade agreements to ensure raw material sources for production and business, support businesses to sign long-term raw material import contracts, and ensure input material sources, stabilize production costs to control inflation.