A lot of pressure for Vietnam's inflation control in 2020

The fluctuating price of pork last year had significant impacts on the market, as the price plummeted in the first half of the year then soared in...

Price management and inflation control would be more complex and difficult this year. 

Managing prices and inflation would be more complex and difficult this year, experts have said.

The fluctuating price of pork last year had significant impacts on the market, as the price plummeted in the first half of the year then soared in the second half.

The pork price dropped from VND46,000 (US$2) - VND50,000 per kilogramme to a record low of VND28,000 - VND32,000 per kilogramme in the first six months of last year.

After that, the price increased gradually from July and soared from October with an increase of about 60 – 80 per cent compared to September and 60 – 95 per cent compared to the beginning of last year.

Prices of pork products are currently very high with the live pig price ranging between VND80,000 - 90,000 per kilogramme and pork at VND160,000 - 180,000 per kilogramme.

After the shock of the pork price increasing by more than 50 per cent in the fourth quarter of last year, curbing inflation below 4 per cent this year was no longer certain when the consumer price index (CPI) of last December increased by 5.23 per cent year-on-year, the highest level in the last nine years, Nguyen Duc Do, deputy director of the Institute of Economics - Finance, told Kinh te & Do thi (Economic and Urban Affairs).

The expert said if pork prices fell sharply around Tet (Lunar New Year), average inflation might be only at 3 per cent this year.

However, if pork prices remained at their current high levels in the first quarter, average inflation could be about 3.5 per cent.

In a worst-case scenario where African swine fever doesn't end in the first half of this year and inflation over the same period last year only starts to decline from the middle of this year, keeping inflation below 4 per cent would be relatively difficult, he said.

Assuming other factors affecting inflation such as oil prices, exchange rates, medical services and education did not change significantly, Do predicted that inflation would increase by 3.5 per cent on average this year.

 

As the price of some commodities such as petrol might rise due to world economic and political instability, experts said inflation would be complicated and unpredictable.

A representative from the Ministry of Finance's Price Management Department stated that the price of some items might see an upward trend.

Specifically, gasoline prices might increase slightly. The price of pork, due to the impact of African swine fever, was still a complex matter. The domestic pork supply is declining, and breeding has not been effective, therefore, the price was expected to continue to increase in the first months of this year, the representative said.

At the same time, health service prices were expected to be affected by the adjustment of management cost and basic salary.

The price in education services also looks set to continue to increase this year.

Regarding electricity prices, although is no plan for an increase this year, the demand for electricity was still high for production and consumption, which would increase CPI.

In addition, the prices of food, beverages and garments might increase at the beginning and end of the year due to shopping needs during the holidays.

To achieve the National Assembly's goal of keeping inflation under 4 per cent this year, the department said price management and inflation control this year must be implemented prudently, flexibly and proactively.

The Ministry of Finance would continue to work with relevant agencies to control market prices, especially during Tet and the first months of the year. — VNS

Comprehensive solutions needed to keep inflation in Vietnam below 4%: experts

Comprehensive solutions needed to keep inflation in Vietnam below 4%: experts

The prices of multiple products and services are forecast to rise this year, putting pressure on inflation.

Inflation to remain below 4 percent in 2020: officials

Inflation to remain below 4 percent in 2020: officials

Inflation for the next 12 months is expected to remain lower than 4 per cent, just like it has over the past three years.  

 
 

Other News

.
Concerns for reform
Concerns for reform
FEATUREicon  06/01/2021 

A strategic advisory body on reform and development is essential in the transitional economy in Vietnam.

Fitch Solutions revises up Vietnam GDP growth forecast to 8.6% in 2021
Fitch Solutions revises up Vietnam GDP growth forecast to 8.6% in 2021
BUSINESSicon  05/01/2021 

Vietnam’s strong growth momentum in manufacturing is expected to continue in 2021, supported by growing external demand from trade deals such as the EVFTA, UKVFTA, and RCEP.

Vietnam retail market records $172 billion in 2020
Vietnam retail market records $172 billion in 2020
BUSINESSicon  05/01/2021 

Such growth rate, while remaining lower compared to the 12.7% recorded the previous year, was an encouraging sign for the business community amid global retail market suffering plunge in revenue during the pandemic.

Vietnam sets high GDP target in 2021 to make breakthroughs
Vietnam sets high GDP target in 2021 to make breakthroughs
BUSINESSicon  05/01/2021 

Pressure from high GDP target in 2021 is expected to help the Vietnamese government to create breakthroughs for growth in subsequent years.

Vietnam’s strong economic recovery to further take Vn-Index to nearly 1,300 in 2021
Vietnam’s strong economic recovery to further take Vn-Index to nearly 1,300 in 2021
BUSINESSicon  05/01/2021 

The fact that interest rates are still very low, will help the local stock markets continue to be an attractive and profitable channel, thereby attracting domestic investor.

Covid-19 costs Vietnam US$19 billion in export revenue
Covid-19 costs Vietnam US$19 billion in export revenue
BUSINESSicon  05/01/2021 

Vietnam could have earned US$300 billion from exports this year but the export revenue stood at just US$281 billion due to Covid-19, said Minister of Industry and Trade Tran Tuan Anh.

Banks report satisfactory business results for 2020
Banks report satisfactory business results for 2020
BUSINESSicon  05/01/2021 

Improving corporate governance and listing shares on the bourse were the major activities of banks in 2020. Digital transformation was also accelerated.

10 outstanding industry and trade events in 2020
10 outstanding industry and trade events in 2020
BUSINESSicon  05/01/2021 

The Ministry of Industry and Trade has announced 10 outstanding events that make their mark on the sector’s success in 2020.

Aviation sector: trying to survive the storm of 2020
Aviation sector: trying to survive the storm of 2020
FEATUREicon  05/01/2021 

2020 was a disastrous year for the aviation and tourism industries, which were hit hard by the Covid-19 pandemic.

Rooftop solar power saw tremendous growth in 2020
Rooftop solar power saw tremendous growth in 2020
FEATUREicon  04/01/2021 

Over 100,000 rooftop solar power works with total capacity of 9,300 MW were connected to the national grid by December 31, 2020.

Overcoming pandemic shocks, maintaining high growth rate, Vietnam is the ‘next Asian miracle’
Overcoming pandemic shocks, maintaining high growth rate, Vietnam is the ‘next Asian miracle’
FEATUREicon  05/01/2021 

Vietnam was among the countries gaining the highest GDP growth rates in 2020, which could serve as a launching pad for further growth.

First trading session of Vietnamese stock market in 2021 opens
First trading session of Vietnamese stock market in 2021 opens
BUSINESSicon  04/01/2021 

The first trading session of Vietnam’s stock market in 2021 opened on January 4, with a gong-beating ceremony held by the State Securities Commission and the Hanoi Stock Exchange (HNX).

Evaluating and estimating state budget to reduce deficit and increase efficiency
Evaluating and estimating state budget to reduce deficit and increase efficiency
BUSINESSicon  05/01/2021 

According to Minister of Finance Dinh Tien Dung’s latest report delivered recently at the National Assembly (NA), Vietnam achieved most of its financial goals in the last four years, including for 2020.

Restoring confidence after a challenging year
Restoring confidence after a challenging year
BUSINESSicon  05/01/2021 

The confidence of European business leaders in Vietnam is returning thanks to the government’s response to COVID-19 during 2020, with the focus on embracing the opportunities in a new normal. 

Building on economic resilience for the future
Building on economic resilience for the future
BUSINESSicon  04/01/2021 

Since the beginning of its reform in the late 1980s, Vietnam has achieved extraordinary results in its economic development.

Impressive growth seen across real estate
Impressive growth seen across real estate
BUSINESSicon  05/01/2021 

While the pandemic has affected nearly every business, Vietnam’s real estate sector has seen significant movements throughout the year. 

Power firms seek foreign funding as loans become expensive, hard to get
Power firms seek foreign funding as loans become expensive, hard to get
BUSINESSicon  04/01/2021 

The quickest and most effective way to raise funding for power projects is to enter into an alliance with foreign investors, Nguyen Anh Tuan, general director of Phu Yen TTP Joint Stock Company, said.

Aviation industry forecast to face a hard year in 2021
Aviation industry forecast to face a hard year in 2021
BUSINESSicon  04/01/2021 

Despite a recovery in the final months of this year, the aviation industry is forecast to face further difficulties in 2021.

Vietnam’s 2020 retail sales see the lowest growth in nine years
Vietnam’s 2020 retail sales see the lowest growth in nine years
BUSINESSicon  04/01/2021 

Vietnam’s total revenue from retail trade and services reached over VND5 quadrillion (US$219.5 billion) in 2020, representing a modest yearly rise of 2.6 per cent, according to the General Statistics Office (GSO).

2020 not a good year for bank stock debuts
2020 not a good year for bank stock debuts
BUSINESSicon  04/01/2021 

Debuting on a new bourse may give a boost to the stock price, but the market reactions were not quite positive for the banks doing so in 2020.

 
 
 
Leave your comment on an article

OR QUICK LOGIN