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Markets & Prices

Last updated: Friday, November 16, 2018

 

CPI Likely to Be Capped under 4 Pct

Posted: Friday, June 29, 2018


The Government of Vietnam is determined to keep the consumer price index (CPI) at less than four per cent in 2018 as set by the National Assembly.

Minister Dinh Tien Dung, Deputy Director of the Steering Committee for Price Regulation, signed Announcement 403/TB-BCDHHG stating the conclusions of Deputy Prime Minister Vuong Dinh Hue, Director of the Steering Committee for Price Regulation, to the meeting on price regulation on May 29, 2018.

CPI growth to be capped below four per cent
According to the Steering Committee for Price Regulation, in the first five months of 2018, central and local authorities continued to make a great effort to manage prices to control inflation. CPI grew by 1.61 per cent in the year to May 2018 and climbed 3.01 per cent from the same period in 2017.

CPI movements in the first five months of 2018 showed that prices basically moved as forecast. Price-rising factors in the last two months mainly stemmed from price fluctuations of some essential commodities in domestic and global markets, not from the Government’s pricing actions.

The Government is determined to control CPI below four per cent in 2018 as expected by the National Assembly although prices of some commodities on global markets are forecast to go up and impact the domestic market.

Based on agreed price scenarios, central and local authorities should continue to carry out well price management measures stated in Notice 259/TB-BCDDDHG on monetary and fiscal policy regulations dated March 30, 2018 of the Director of the Steering Committee for Price Regulation; to police prices of essential goods; to review and finalise legal documents on specialised price management.

Sectors must control prices of essential goods
Sectors stabilised prices of commodities regulated by the State in June 2018, continued to review to speed up price reduction of potential items (e.g. medical services, medicines, medical supplies, and traffic tolls on BOT roads). As for commodities whose market prices have picked up, for example, petroleum, food and pork, they necessarily take initiative in reviewing and balancing the supply and demand, rationally use price stabilisation funds to normalise the market, and focus on publicity, transparency and price information to control expected inflation.

Specifically, for agricultural products, the Deputy Prime Minister asked the Ministry of Agriculture and Rural Development to update information to count sows and pigs to estimate pig supplies by region in 2018, report to the Steering Committee for Price Regulation to have active coordination measures to avoid localised shortages resulting in price hikes that may cause negative impacts on overall price performances and harm consumers’ interests. The ministry also needs to pay attention to communications to ensure the objectivity, fullness and accuracy of information. It necessarily continues to step up negotiations for export market expansion for agricultural commodities, accelerate downstream processing, have solutions to boost sugar consumption to reduce glut. The ministry needs to raise the value of exported Vietnamese rice and increase high-quality rice in the rice export structure.

For petroleum products, the Deputy Prime Minister assigned the Ministry of Industry and Trade to coordinate with the Ministry of Finance to manage domestic petrol and oil prices according to regulations, rationally use price stabilisation funds, and have active response scenarios to deal with possible gasoline price hikes.

For electricity, the Ministry of Industry and Trade was tasked to review input costs to regulate electricity prices in line with the overall price control scenario in 2018 and strive to reduce input costs to avoid power price hikes this year.

For medicines and medical supplies, the Ministry of Health was assigned to increase centralised national drug tenders and intensify management of tenders of medical supplies and equipment as per Announcement 145/TB-VPCP dated April 18, 2018 stating the conclusions of Deputy Prime Minister Vuong Dinh Hue at the meeting with the Ministry of Health (on early pilot bidding for medical supplies).

For educational services, the Ministry of Education and Training will soon amend Circular 55/2011/TT-BGDDT dated November 22, 2011 on promulgation of the Statute of Student Parents Board, have measures to control material prices in the new school year, and basically address improper collections of extra fees. The ministry needs to study management mechanism, actively grasp information, register the price increase roadmap, allocate and control the level and timing of raising educational service prices.

For construction materials and real estate, the Ministry of Construction needs to closely monitor prices of construction materials and real estate market, proactively propose measures to stabilise the market, ensure the supply when the demand for raw construction materials looks up, actively research solutions on replaced materials used in ground levelling.

For land-use rights market, the Ministry of Natural Resources and Environment needs to closely watch for the supply and demand, market price of land-use rights in big cities to proactively propose measures to stabilise the market if it undergoes abnormal volatility.

T.L








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