Regulating prices and controlling inflation in the "variables"

VCN - Unpredictable developments will certainly have a major impact on the price market as well as domestic inflation control in 2024. Therefore, successful results and solutions from 2023 will be a "pedestal" for 2024.
Ensure flexibility, proactivity in price management to control inflation Ensure flexibility, proactivity in price management to control inflation
Vietnam should stay proactive to cope with inflationary pressures Vietnam should stay proactive to cope with inflationary pressures
Proposing to have information sharing mechanism in price management Proposing to have information sharing mechanism in price management
It is necessary to be cautious and flexible in operating the price market and controlling inflation. Photo: HD  ​
It is necessary to be cautious and flexible in operating the price market and controlling inflation. Photo: HD ​

Control to maintain economic attractiveness

2023 has been the 10th consecutive year that Vietnam achieved its goal of controlling inflation. In particular, the consumer price index (CPI) in 2023 increased by 3.25% compared to the average in 2022. This is a higher increase than the average increase in 2015, 2016, 2019 to 2022 but much lower than with the average CPI increase of the remaining years in the period 2008-2023.

Therefore, this is considered one of the "bright spots" in macroeconomic management last year, especially in the context of high inflation and market prices in many countries, greatly affecting the social and economic life. Furthermore, this is also a "pedestal" for our country to continue controlling inflation and market prices in 2024 and the coming time in accordance with the set goals.

Regarding this issue, Associate Professor, PhD. Vu Duy Nguyen, Head of the Institute of Economics and Finance (Vietnam Academy of Finance), said that controlling inflation and market prices in 2024 should be set in the context of Vietnam's continued efforts to promote economic recovery, maintaining high GDP growth rate according to the 5-year development plan for the period 2021-2025; At the same time, maintain a high level of GDP growth in the ASEAN region, Asia and the world to maintain the attraction of foreign investors to Vietnam in the coming time.

Reality shows that Vietnam has many advantages for operating a stable price market in 2024. Specifically, fiscal policy and monetary policy continue to be closely coordinated and maintained in an easing direction on the basis of foreign exchange reserves, budget revenues, trade balance surplus, attracting and disbursing FDI capital increasingly, abundant bank liquidity, interest rates continuing to be controlled reduction... In particular, the management and price administration of a number of important products have been continuously focused on, along with being proactive in forecasting, impact assessment, and build price operating scenarios and enhance coordination among ministries, branches and localities.

In 2024, the Government aims to prioritize promoting economic growth (6-6.5%), maintaining macroeconomic stability, controlling inflation (4-4.5%), and ensuring big balances. However, with the economic context and advantages mentioned above, many experts believe that inflation in Vietnam will tend to decrease, at less than 4%.

Not subjective when there is still a lot of pressure on inflation

Although many positive results have been achieved, Prime Minister Pham Minh Chinh continues to make recommendations not to be subjective or complacent because many difficulties remain and many unpredictable "variables" in 2024 will occur, creating great pressure on inflation and market price management. According to a report by the International Monetary Fund (IMF), global inflation forecast is at 5.8% in 2024, inflation in many countries will remain higher than the target inflation level until 2025, causing interest rates to increase but will still remain high in the near future, hindering global economic growth.

The report of the Price Management Department (Ministry of Finance) also stated that the world economic picture in the first half of 2024 was forecast to be less prosperous because developments of political and military conflicts between Russia and Ukraine, and between Israel and Hamas was still increasing, causing spillover effects on many economies. Central banks were also continuing to fight inflation, persisting with high interest rate policies, tightening lending standards... For Vietnam, the economic development speed was also facing obstacles due to reduced exports when consumer demand decreased. Meanwhile, our country's economy depended heavily on imported raw materials and was highly open, so the domestic price movements was closely linked to fluctuations in world raw material prices, which were still high and unpredictable.

In addition, according to experts, in 2024, our country will also adjust the prices of State-managed services in the direction of correctly and fully including all factors and implementation costs in the price of medical and health services. education fees, thereby increasing CPI. Vietnam Electricity Group (EVN) can continue to increase electricity prices when input materials such as gasoline, oil, and coal are all at high levels. Implementing wage reform and increasing the regional minimum wage from mid-2024 will lead to an increase in the prices of household consumption goods and services. Recovery support programs, disbursement of public investment by the Government, tourism services... are also expected to put pressure on the price level in the next time.

From these issues, experts emphasize the need to be cautious in price management and inflation control. In particular, it is necessary to synchronously implement a flexible and prudent monetary policy, ensuring proactiveness and efficiency, coordinating with the management of a reasonable open, focused fiscal policy. Furthermore, it is necessary to closely monitor price and inflation developments in the world and promptly warn of risks affecting prices and inflation in Vietnam. Ensuring smooth supply, circulation and distribution of goods.

According to the Price Management Department, to continue promoting recent successes, the Ministry of Finance will proactively coordinate with ministries and branches to advise the Prime Minister, Deputy Prime Minister - Head of the price Executive Steering Committee. and implement according to authority synchronously solutions and measures to proactively respond to challenges in price management. This will strengthen inspection and supervision, focusing on information and propaganda to control inflation expectations...

​By Minh Chi/ Binh Minh

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