Spacious room to control inflation target

Ms. Nguyen Thu Oanh

Could you please elaborate on the factors affecting Vietnam's inflation situation in the past 9 months?

The inflation rate of the Eurozone in September 2024 increased by only 1.8%, the lowest in 3.5 years and below the ECB's target of 2%.

In August 2024, US inflation increased by 2.5% year-on-year; Spain increased by 2.3%; Germany increased by 1.9%; France increased by 1.8%. In Asia, India's inflation in August 2024 increased by 3.7%; the Philippines increased by 3.3%; Japan increased by 3%; Indonesia increased by 2.1% and South Korea increased by 2%.

The cooling of global inflation has eased Vietnam pressure from the inflationary import channel, the average import price index of goods in the first 9 months of the year decreased by 1.73% year on year.

Particularly, petroleum product, one of the items that accounts for a significant proportion in the basket of goods used to calculate Vietnam's CPI, while its price depends mainly on world prices.

In addition, to control inflation according to the target set by the National Assembly, the Government has directed ministries, branches and localities to drastically implement many solutions such as ensuring smooth supply, circulation and distribution of goods, especially essential goods serving people's lives.

At the same time, focusing on strengthening price management and operation during natural disasters, storms and floods, promptly issuing national reserve goods to support and provide relief to people affected by storms and floods.

In addition, the Government continues to implement support policies on taxes, fees and charges to support people and businesses, such as the policy of reducing environmental protection tax on gasoline, oil and grease; 2% VAT on some groups of goods and services; 50% of registration fees for domestically manufactured and assembled cars. Besides, 36 fees and charges are enjoying tax abatement to support cost reduction for businesses and people in 2024.

Moreover, the proactive, flexible, timely and effective monetary policy also contributed to controlling inflation. Thanks to that, Vietnam's inflation in the first 9 months was put under control at an appropriate level to support economic growth.

Based on the results achieved in the past 9 months, how do you assess the ability to control inflation in 2024 as well as the factors that will affect inflation in the remaining months of the year, Madam?

Since inflation in the first 9 months of 2024 was at 3.88%, there is still a lot of room to achieve the inflation target set by the National Assembly for this year.

However, there are still some factors that need to be carefully monitored to control inflation in the last months of this year. Accordingly, the risk of natural disasters and adverse weather may increase food prices in some localities.

At the same time, as a rule, in the last months of the year and on holidays and Tet, prices of food, beverages, clothing, equipment and household appliances often increase, which will also impact the CPI increase.

The forecast of a sharp increase in electricity demand for production and consumption in the coming time will also be a factor putting pressure on inflation.

In addition, the world's input material prices are at a high level while the world's economic and political situation is undergoing in a more and more complicated and unpredictable direction. The high price of the US dollar also surplus the cost of importing raw materials, putting pressure on the domestic price level of goods.

Meanwhile, Vietnam still heavy depend on importing raw materials for production, so fluctuations in world commodity prices will affect costs and prices, creating pressure on business production and thereby pushing up domestic consumer goods prices.

Notably, although stimulus packages, lowering lending interest rates, expanding credit, and boosting public investment enable to ease economic difficulties, they can also put pressure on price levels if money supply is not properly controlled.

Thank you very much!