Striving for average CPI not to exceed 4%

Deputy Prime Minister and Minister of Finance Ho Duc Phoc chaired the meeting. Photo: Khanh Huyen

Pressure is increasing if money supply is not properly controlled

At the meeting of the Price Steering Committee on evaluating the results of price management and operation in the first 10 months of 2024 and orienting price management for the remaining months of 2024 on October 30, 2024, Mr. Nguyen Minh Tien, Director of the Price Management Department (Ministry of Finance) said that the domestic market price level fluctuates according to the rule of increasing in the first month of Tet, then decreasing and remaining relatively stable in the following months.

Specifically, compared to December 2023, the consumer price index (CPI) in September 2024 rose by 2.18% and compared to the same period last year, it rose by 2.63%. On average, in the first nine months of 2024, the CPI grew by 3.88% year-on-year.

The Ministry of Finance's report at the meeting said that there are still some factors that put pressure on the price level in the remaining months of 2024.

For example, adjusting the price of state-managed services in the direction of correctly and fully calculating all factors and costs will increase the CPI.

In particular, in the last 3 months of 2024, the fluctuation of the household electricity price index will be affected by the adjustment of electricity prices on October 11, 2024 and will depend on the amount of electricity consumption, which may increase the electricity price.

The prices of energy fuels on the world market continue to be complicated and may fluctuate in an upward trend.

According to the Ministry of Construction, the prices of sand, stone, and asphalt tend to increase due to high construction demand in the last months of the year and limited natural exploitation resources, especially the price of sand.

Mr. Nguyen Minh Tien, Director of the Price Management Department (Ministry of Finance) reports at the meeting. Photo: Khanh Huyen

In addition, stimulus packages, lowering lending interest rates, expanding credit, and boosting public investment help to remove difficulties for the economy, but can also put pressure on the price level if money supply is not properly controlled...

Based on the target of controlling the average CPI for the whole year at 4-4.5%; synthesizing information and updating forecasts of price trends of important essential goods combined with scenarios for adjusting prices of medical services, education services, and electricity prices affecting price levels in the remaining months of 2024, the Ministry of Finance updated 2 scenarios for average inflation in 2024.

Accordingly, the first scenario is, the average CPI in 2024 is forecast to increase by about 3.7% compared to 2023. The second scenario is, the average CPI in 2024 is forecast to increase by about 3.92% compared to 2023.

The General Statistics Office forecasts the average CPI in the range of 3.7-3.9%. The State Bank of Vietnam forecasts the average inflation in 2024 to increase by about 3.8-4%.

Striving for average CPI not to exceed 4%

At the meeting, Deputy Prime Minister and Minister of Finance Ho Duc Phoc, Head of the Price Management Steering Committee, requested to strive for an average CPI not to exceed 4% by the end of 2024.

The Deputy Prime Minister and Minister emphasized that to ensure macroeconomic stability, ensuring the supply of essential goods is extremely important.

Deputy Prime Minister and Minister of Finance Ho Duc Phoc requests to strive for an average CPI of no more than 4% by the end of 2024. Photo: Khanh Huyen

Therefore, the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development and relevant ministries and agencies are requested to closely monitor market developments to have solutions to ensure supply and demand of essential goods.

In particular, price management, ensuring people's consumption needs during the upcoming Lunar New Year, paying attention to poor households and disadvantaged families; continuing to proactively operate monetary policy, managing exchange rates well.

The Deputy Prime Minister and Minister of Finance also requested ministries and agencies, based on their assigned functions and tasks, to closely monitor developments in strategic commodities on the world market, developments in the world situation that affect the domestic market to prepare solutions and scenarios for flexible and effective price management and operation.

Furthermore, continuing to review to have a roadmap for adjusting prices of public services and commodities managed by the State according to market principles, conduct assessments and carefully calculate impacts to avoid causing major disruptions in price levels, affecting people's lives, ensuring the goal of controlling inflation.

The Deputy Prime Minister and Minister requested to flexibly and effectively use tools and measures to regulate prices in accordance with the provisions of the law on prices, control and market stabilization.

Continuing to synchronously deploy solutions to promote production and business development; effectively implementing the work of anti-smuggling...

Deputy Prime Minister and Minister of Finance Ho Duc Phoc also directed to continue to review and comprehensively study the provisions of the law on prices and guiding documents to propose adjustments and improvements to further enhance the effectiveness of price management.

Implementing communication and information work widely to the public before adjusting prices of State-managed goods to avoid inaccurate information that causes public confusion.