4% inflation target set for 2021 within reach: experts

Vietnam is likely to meet its target of reining in inflation at a rate of below 4% in 2021, although experts warn that unfavourable factors could impact market fluctuations.

4% inflation target set for 2021 within reach: experts
Despite unfavourable factors, including the COVID-19 pandemic and natural disasters, economic experts forecast Vietnam is likely to control its inflation at 4% for 2021. (Illustrative image).

According to the Price Management Department under the Ministry of Finance, the novel coronavirus (COVID-19) outbreak in 2020 had a comprehensive and far-reaching influence over the global economy, prompting it to fall into a deep recession. In addition, it disrupted the global supply chain, causing commodity prices to violently fluctuate in an unpredictable manner, especially the price of fuels such as petrol and oil.

With the country being part of the global supply chain it has borne the brunt of the pandemic, especially in terms of the negative affect on the law of supply and demand within the domestic market. Given these poor indicators, the Government has moved to swiftly direct relevant ministries, agencies, and localities to adopt sound and flexible price management measures in an effort to keep the consumer price index (CPI) at 3.23%, much lower than the 4% target set by the National Assembly (NA) for 2020.

Dr. Ngo Tri Long, a leading economic expert, notes that Vietnam did a stellar job in 2020, meeting its dual goal of economic recovery and epidemic prevention, along with dealing with the significant damage caused by swine flu and natural disasters, including severe flooding and landslides.

However, Dr. Nguyen Duc Do, deputy director of the Institute of Economics and Finance, warns that inflation is likely to rise during the year ahead following COVID-19 containment efforts and the gradual recovery of the economy. Moving forward, Dr. Do assumes that inflation in 2021 will not be too high as the national economy has yet to pick up full steam.

“Assuming that the basic inflation increases by an average of 0.23% per month, equivalent to the increase of 2019, and oil and petrol prices rise slightly, the CPI for December this year is projected to hover at around 3%, prompting the average inflation for the whole year to stay at more than 2%. In case of strong fluctuations in oil or food prices as seen in 2019, the average inflation this year is likely to remain below 3%,” analyses Dr. Do.

 

Furthermore, Dr. Le Quoc Phuong, former official of the Ministry of Industry and Trade, forecasts the CPI for 2021 will expand to either between 4% to 4.5%, or between 3.8% and 4%, depending on whether or not the pandemic is completely brought under control and the global economy enjoys a total recovery. 

According to Dr. Ngo Tri Long, it remains very challenging to make a projection due to the erratic global market. He believes that the unpredictable developments caused by the COVID-19 pandemic will negatively affect the domestic economy and the banking system, thereby resulting in low economic and credit growth. In line with this, inflation will be put under great pressure from the impact of global prices, natural disasters, and epidemics.

“Given the context, price management and inflation control in 2021 should continue to be implemented in a prudent, flexible, and proactive manner, alongside closely monitoring any market changes, including the prices of essential commodities,” Dr. Long recommends. “Moreover, the fiscal policy should be co-ordinated closely in parallel with the monetary policy and other macroeconomic policies to keep inflation in check. At the same time, the Government should introduce more measures to remove difficulties for production and business and support people affected by the COVID-19 pandemic.”

A representative of the Price Management Department assures that the Ministry of Finance will closely watch any market fluctuations in the year ahead in order to regulate the law on supply and demand of commodities, especially for those with high consumption demands during peak seasons. This will be done as part of efforts to control inflation at below 4% as set by the NA.  VOV

Inflation control cannot be taken lightly

Inflation control cannot be taken lightly

Although many forecasts said that inflation would be controlled at less than four per cent this year, economists recommended it was still important to pay attention to inflationary pressures.

Central Bank expected to cut key rate to aid economy

Central Bank expected to cut key rate to aid economy

The inflation in 2020 is forecast at 3.3%, significantly lower than the target of 4% set by the government.

 
 

Other News

.
Real estate appeal remains amid tumult
Real estate appeal remains amid tumult
BUSINESSicon  13/02/2021 

Vietnam has more real estate investment opportunities than other more mature Asia-Pacific markets, though certain difficulties remain.

Domestic coffee exporters expect a promising year
Domestic coffee exporters expect a promising year
BUSINESSicon  13/02/2021 

Vietnam’s coffee exports are expected to have a good start to 2021 after a gloomy year due to the severe impacts from the COVID-19 pandemic, according to industry insiders.

2021 GDP to grow 6.72 pct. in optimistic scenario: NCIF
2021 GDP to grow 6.72 pct. in optimistic scenario: NCIF
BUSINESSicon  12/02/2021 

The National Centre for Socio-Economic Information and Forecasting (NCIF) has released a forecast on Vietnam’s economic performance in 2021, with GDP growth of 6.72 percent and CPI of 4.2 percent under an optimistic scenario.

Silver lining found in investment channel risk this year
Silver lining found in investment channel risk this year
BUSINESSicon  12/02/2021 

Investors are pinning their hopes on different investment channels this year despite the many difficulties and risks brought about by COVID-19, analysts have said.

Construction firms urged to apply technology to improve efficiency
Construction firms urged to apply technology to improve efficiency
BUSINESSicon  11/02/2021 

The impacts of the COVID-19 pandemic and Industry 4.0 required construction firms to invest in technology to improve efficiency.

Vietnam promotes export of processed agro-forestry-fisheries products
Vietnam promotes export of processed agro-forestry-fisheries products
BUSINESSicon  11/02/2021 

The project aims at improving the quality and value of agro-exports to meet the regulations of importers.

Struggling shopkeepers at HCM City traditional markets learn to sell online
Struggling shopkeepers at HCM City traditional markets learn to sell online
BUSINESSicon  11/02/2021 

With traditional markets in HCM City struggling amid the COVID-19 pandemic, more and more of their shop owners are looking to sell their goods on online channels such as delivery apps and social media.

Pandemic reveals enterprises’ view of responsibility
Pandemic reveals enterprises’ view of responsibility
BUSINESSicon  11/02/2021 

The unprecedented challenges arising from the COVID-19 pandemic have highlighted more than ever the importance of responsible crisis management and sustainable development at enterprises.

Bad debts of 20 banks up 4.5% in 2020
Bad debts of 20 banks up 4.5% in 2020
BUSINESSicon  11/02/2021 

The non-performing loans (NPLs) of 20 local banks at the end of 2020 rose by 4.5 per cent year-on-year to VND83.4 trillion (US$3.58 billion), according to the banks’ latest financial statements.

Stocks to ride on Vietnam economic recovery in 2021
Stocks to ride on Vietnam economic recovery in 2021
BUSINESSicon  10/02/2021 

Cement, petroleum and retail stocks are those that could see strong rises in 2021.

VIETNAM BUSINESS NEWS FEBRUARY 11
VIETNAM BUSINESS NEWS FEBRUARY 11
BUSINESSicon  11/02/2021 

Ministry to boost trade defence measures in line with int’l commitments

It’s time for private economy to develop
It’s time for private economy to develop
BUSINESSicon  13/02/2021 

Professor Dr. Tran Dinh Thien, a member of the Government Economic Council talks about the important role of private economy in national economic development.

Organic Tet cakes become a hit
Organic Tet cakes become a hit
BUSINESSicon  09/02/2021 

Organic banh chung (square glutinous rice cake) sold in Ho Chi Minh City for the first time for Tet (Lunar New Year) has become very popular.

Vietnam rises two places in Bloomberg innovative economy index
Vietnam rises two places in Bloomberg innovative economy index
BUSINESSicon  10/02/2021 

Vietnam has moved up two places to 55th in the list of the world's 60 most innovative economies compiled by Bloomberg, but lags far behind Asian peers.

Novartis honored as pioneer in digital transformation in healthcare
Novartis honored as pioneer in digital transformation in healthcare
BUSINESSicon  09/02/2021 

Novartis is the sole pharmaceutical firm among a total of 34 units that were honored for their efforts and outstanding contributions to the Digital Transformation of the Healthcare Sector in 2020, at the National Digital Transformation Congress.

The poor, as well as businesses, fall into 'black credit' trap
The poor, as well as businesses, fall into 'black credit' trap
FEATUREicon  09/02/2021 

The poor, who lack financial information and knowledge, are often hurt by black credit. But many businesspeople have also become victims.

E-commerce sites launch Tet online sale campaigns
E-commerce sites launch Tet online sale campaigns
BUSINESSicon  09/02/2021 

While general stores and supermarkets are about to close for Tet holiday, e-commerce websites have stated they are ready to take orders even on Tet days.

VIETNAM BUSINESS NEWS FEBRUARY 10
VIETNAM BUSINESS NEWS FEBRUARY 10
BUSINESSicon  10/02/2021 

HCM City targets domestic market for tourism recovery

Leading exports take advantage of new generation FTAs
Leading exports take advantage of new generation FTAs
BUSINESSicon  09/02/2021 

Truong Dinh Hoe, secretary general of the Vietnam Association of Seafood Exporters and Producers (VASEP), said the EVFTA, which took effect last August, has opened up opportunities for shrimp exporters.

Deluge of foreign capital marks strong start to 2021
Deluge of foreign capital marks strong start to 2021
BUSINESSicon  12/02/2021 

The wave of high-tech companies investing billions of US dollars in Vietnam is already materialising, raising the question for the country on exactly how to absorb all the incoming capital.

 
 
 
Leave your comment on an article

OR QUICK LOGIN