return icon

2020 inflation rate rides on outbreak eventualities

Vietnam is likely to experience difficulties in controlling inflation this year due to global uncertainties and unexpected price rises of many items in the local market in the wake of the ongoing coronavirus epidemic.

2020 inflation rate rides on outbreak eventualities

Dang Duc Anh, vice director of the National Centre for Socio-Economic Information and Forecast (NCIF), told VIR that if the COVID-19 outbreak continues until the second quarter of this year, it will be “very hard” for the government to keep the inflation rate for the whole year under 4 per cent as hoped.

“The epidemic will drive prices of goods and services up strongly in the global market, while Vietnam’s industrial production largely depends on material imports such as electronics, textiles and garments, and footwear,” Anh said. “Meanwhile, prices of these items are uncertain. Shortages often lead to high prices.”

Currently, all domestic and foreign enterprises in the industries of textiles and garments, electronics, automobiles, and pesticides are facing tough times due to a shortage of materials, 30-60 per cent of which are imported from China.

In January, the NCIF forecast that Vietnam’s 2020 inflation rate will be about 3.2 per cent.

“However, we will have to revise this because everything has changed due to COVID-19. Our new inflation forecast for 2020 may be at least 4 per cent,” Anh said.

The Ministry of Planning and Investment’s (MPI) latest scenarios also show that the COVID-19 will make it an uphill battle to control inflation below 4 per cent this year.

If the outbreak is fully controlled by the end of the first quarter, if the price of fuel does not rise, and if education service costs increase in accordance with the government’s roadmap, the inflation rate for 2020 will be 3.96 per cent.

However, if the epidemic is quelled at the end of the first quarter or even in the second quarter, but if there is an average 10 per cent increase in price of pork, a climb of 5 per cent in fuel costs, and a rise of 10 per cent in gas price – in addition to negative impacts of droughts and water shortages for production – the inflation rate for the year will ascend 4.86 per cent.

“Effects of the epidemic will increase the prices of household-oriented water, healthcare services, and electricity,” said an MPI report on the impacts of COVID-19 on the domestic economy. “If the outbreak continues until the second quarter, prices of fresh foodstuff will sharply increase due to shrunken production activities, and notably they will move up strongly during the remaining months of the year.”

The Asian Development Bank and the World Bank are now reassessing Vietnam’s economic performance, and will soon release fresh evaluations of the country’s inflation rate for 2020. Previously, both banks forecast that the rates would be 3.5 and 3.3 per cent, respectively.

However, with the economy negatively impacted by COVID-19, it is expected that the lenders will adjust the inflation rate for Vietnam this year.

For February and the first two months, the average on-year consumer price index (CPI) rose 5.91 per cent, recording a seven-year high as compared to the same periods since 2013, according to the General Statistics Office.

The office said such a high CPI will “threaten efforts” from the government to keep inflation below 4 per cent this year. It has also proposed that the government refrain from increasing the electricity price in order to support local production and people’s livelihoods. However, experts said that even with no such plan, demand for electricity is still high for production and consumption, which will in turn increase the CPI.

Vietnam’s inflation rate last year increased 2.79 per cent on-year. VIR

Thanh Dat

VN central bank makes net cash withdrawal amidst high inflation pressure

VN central bank makes net cash withdrawal amidst high inflation pressure

The State Bank of Vietnam made a net cash withdrawal worth VND86 trillion out of the economy through open market operations (OMO) from January 20 to February 14.  

Money oversupply increases core inflation

Money oversupply increases core inflation

Keeping the inflation rate at 4 percent in 2020 will be a challenging task, not only because of the pork price escalation, but also money excess.


A unique cave awaits explorers in Quang Binh Province

Va Cave in the core zone of the Phong Nha- Ke Bang National Park in Quang Binh Province, with its unique stalagmites and stalactites, is a natural beauty waiting to be discovered by explorers.

The most important 'economic corridors' for next 10-30 years

The national planning draft for 2021-2030 with a vision towards 2050 focuses on the formulation and development of economic corridors, dynamic zones, large cities and economic zones associated with the national infrastructure framework.

Artisans strive to keep traditional craft alive

Artisan Tran Van Ban is busy all day from early in the morning to the evening. He is carving out beautiful mooncake molds to serve people's demands for the Mid-Autumn Festival which is approaching in the next few weeks.

Goalkeeper Dang Van Lam returns home to join a V.league 1’s club

Goalkeeper Dang Van Lam is set for a return to V.League 1 after touching down in HCM City with his agent.

VN Aviation Business Association proposal raising domestic airfare ceiling

The president of the Vietnam Aviation Business Association (VABA) has proposed to adjust the ceiling fare for domestic airlines to promote the industry's recovery.

More than 251 million doses of COVID-19 vaccines administered in Vietnam

More than 251 million doses of COID-19 vaccines have been administered to Vietnamese people of all ages across the country, including nearly 100,000 doses given on August 14, according to the Ministry of Health.

Foreign experts learn from Vietnam’s biphasic in vitro maturation technology

A group of four Australian doctors and experts visited My Duc Hospital in Phu Nhuan district, Ho Chi Minh City, to learn from the Vietnamese side’s experience in biphasic in vitro maturation (CAPA-IVM) from August 13-14.

HCM City ready to reactivate COVID-19 treatment hospitals

The Department of Health of Ho Chi Minh City has recently requested its medical facilities to get plans readied for the acceptance and treatment of COVID-19 patients in the context of increases in the number of new cases.

How many supermarkets are in Hanoi, HCM City?

In some localities in the country, no new supermarket has been set up over the last seven years.

Can the Vietnamese metaverse classroom compete with Facebook and Google?

With beautiful graphics, colors and materials, Vietnam’s Elite Meta is dreaming of competing equally with giants Facebook and Google.

PM thanks Russian scientists for preservation of President Ho’s embalmed body

Russian experts have joined the preservation of President Ho Chi Minh’s body for over 50 years since he passed away in 1969.

Shares to keep upward trend this week: brokers

Vietnamese shares are forecast to continue their upward trend this week as profit-taking pressure is cooling down significantly.

Emulating the ambitions of Singapore’s high-tech vision

With its vibrant economic development, Vietnam offers an unparalleled investment destination for Singaporean corporations.

Entertainment and cultural events of the week (August 15-21)

Upcoming entertainment and cultural events in Vietnam's major cities on August 15-21.

My, Nghi represent Việt Nam at Simone Asia Pacific Cup

Nguyen Thao My and Ngo Bao Nghi will battle it out for personal and team glory at the inaugural Simone Asia Pacific Cup in Indonesia later this month.