Stabilize inflation 2018: Needs contributions from the ministries

	Concern about inflation
	Price management to avoid unreasonable price increases
	Government leader warns higher inflationary pressure this year

The price of food increased due to increasing demand of people. Photo: Hong Van.

Many factors make the price increase

The General Statistics Office of Vietnam (GSO) released statistics that CPI had increased by 0.73% over the previous month, an increase of 3.15% over the same period last year, an increase of 1.24% over December last year. Thus, the average CPI in the first two months of 2018 increased by 2.9%. According to the Price Management Department, in terms of commodity structure, 9 out of 11 commodity and service groups have increased as follows: food and food service increased by 1.53%; traffic increased by 0.79%; beverages and cigarettes increased by 0.75%; commodities and other services increased by 0.74%; culture, entertainment and tourism increased by 0.72%; equipment and household appliances increased by 0.27%; garment, hats, and shoes increased by 0.2%; medicines and medical services increased by 0.07%; education increased by 0.02%. There were two categories of price reductions as follows: housing and construction materials decreased by 0.09%; and post and telecommunication decreased by 0.07%.

Regarding the factors making price increase, the GSO said: purchasing power of Lunar New Year 2018 increased from 12% -15% compared to weekdays and by 10% over the year 2010 Dinh Dau festival mainly due to factors as follows: positive economy in 2017, increasing industrial production, positive business performance, and low inflation. The price of food increased due to an increase in demand by people, besides the rice businesses collect rice for export contracts to Indonesia and the Philippines. The price of fresh food (pork, beef and seafood) increased from 1% to 8%, especially pork because the price in the previous month was low, so local prices increased by 7% due to Tet consumption. The carriage fee of passengers by car increased by 40% due to the additional transport units. Train ticket prices increased by 19.26% because the Vietnam Railway Corporation increased ticket prices in the Lunar New Year holiday.

However, many other factors also contribute to lowering the price pressures. Implementing the Directive of the Prime Minister on the organization of the people for the Tet holiday, the ministries, branches and People's Committees of provinces and cities have actively carried out the review of the supply and demand balance for goods and services in Tet holiday. Activities of production and stockpiling for Tet holiday of enterprises were implemented from late 2017 to Tet. The quantity of goods on the market is plentiful in quantity, diversified in types and forms.. Supermarkets, large commercial centers continue to be the places which attract consumers by creating peace of mind for buyers about origin, brand as well as food hygiene and safety standards and stable price. Many supermarkets opened early and closed late in the peak shopping week, bringing the supply of goods to the market continuously. Essential commodities (electricity, clean water, petrol) are fully supplied, petrol prices are reduced, electricity prices for daily life and clean water stayed stable before, during and after Tet.

In fact, to ensure price stability in the past two months, before the Lunar New Year, the Department of Price Management has reported to leaders of the Ministry of Finance to deploy working groups to check the price situation during and after Tet. At the same time, the market price, review and evaluation have been timely reported to the authorities to stabilize prices. In the implementation of Official Telegraph No 240 / CĐ-TTg of the Prime Minister on urging tasks after Tet, the Price Management Department has advised the Minister of Finance to issue documents requesting People's Committees of provinces and cities. Under their authority, the People's Committees of the provinces and cities shall carry out price management in accordance with the Prime Minister's direction not to increase prices in the first quarter 2018 to create price stability right at the beginning of the year. Along with that, the authorities should control post-Tet services, especially the festival services and tourism.

Abundant supply

March 2018 is the time after the Lunar New Year, also the time of the festival taking place across the country, increasing the demand for travel, consumption of food, families dining out, and shopping for festivals. This will cause the market prices at the beginning of March 2018 to increase slightly. However, with the abundant supply of goods from the ministries and localities from the end of 2017, it balances supply, demand, as well as market prices after Tet.

Mr. Nguyen Anh Tuan, Director of the price management department said inflation would be under pressure in 2018. The first factor is the group of prices of non-health insurance services of 18 provinces and cities. The second one is price education services that continue to adjust to the market which is expected to increase about 8-10%. Thirdly, by the end of 2017, the Ministry of Industry and Trade set electricity tariffs that will affect the next round by 2018. The fourth group is the service group that moves from fees to prices and continues to operate in the market..

Besides, there are many positive factors to achieve price stability. Supply of goods is quite plentiful; and the post-telecommunication service sector is also expected to decline in 2018. The government's tightening of core inflation below 2% will also have an impact on reducing inflation. The Ministry of Health is also under strict control, especially through bidding to reduce the price level, contributing to price stability in 2018.

In order to keep inflation below 4%, from the beginning of 2018, Deputy Prime Minister Vuong Dinh Hue - Head of Price Steering Committee asked ministries to set up pricing scenarios with groups which belong to functions of ministries, sectors such as health, education and other service groups. For groups of essential goods, Mr. Nguyen Anh Tuan said that the authorities should take measures, such as for petrol, the market price management but must be regulated by the State through price stabilization tools. There is a need for a schedule to control the price level; food to promote production and supply and demand efficiently so that price levels are more appropriate. Another important solution is to strengthen inspections of prices from price formation, listing prices and selling at listed prices, to strictly handle price manipulation which destabilizes the market. Propagation for commodity groups is also very important, especially not causing psychological inflation to people to stabilize the price level.

Flexible price management needed to control inflation Economic experts has argued that keeping inflation rate in check is a feasible target for this year, ...

"In general, in order to keep inflation below 4% as set by the Government, it is necessary to require contributions from all ministries and sectors in price regulation and monetary policy," the representative of the price management department said.