Different scenarios for Vietnam's CPI in 2019 outlined
Experts have outlined a number of different consumer price index (CPI) scenarios for this year, which are all below 4 per cent as requested by the National Assembly.
During a seminar held Thursday in Ha Noi by the Institute of Economics and Finance (IEF) under the Academy of Finance, many economic experts said the target of keeping the country's inflation below 4 per cent was feasible. Some even forecast CPI might be below 3 per cent.
Nguyen Ba Minh, Director of the Institute of Economics and Finance, predicted that CPI this year would climb by 3.0 to 3.5 per cent.
In the second half of the year, a series of factors would be the key drivers of CPI such as rising food prices, especially pork, due to the impact of African swine fever and rising prices of natural resources worldwide after decreasing for a year, Minh said.
“It is likely that the State will continue to increase tuition fees and healthcare service prices. The monthly basic salary for civil servants and public employees will also be raised to VND1.49 million. These will be the factors putting pressure on the CPI at the end of this year,” Minh said.
However, there are also some factors that will curb CPI growth such as the predicted world economic downturn, which would stop the price of raw materials recovering, as well as the Government’s drastic measures to stabilise prices and monetary policies.
Nguyen Duc Do, from the Institute of Economics and Finance, outlined three inflation scenarios, which will stand at 2.5 per cent, 3 per cent and 3.54 per cent.
“After the General Statistics Office announced the average inflation rate for the first six months of this year at 2.64 per cent, there is a high possibility that inflation this year follows the low scenario,” Do said.
“Petrol prices should not increase sharply in the months to come, and the exchange rate will be controlled by the State Bank in a stable manner, so the overall inflation from now until the end of the year is expected to fluctuate between 1.2 per cent and 2.5 per cent. Therefore, average inflation for the whole year 2019 will hover around 2.5 per cent,” he said.
According to Nguyen Ngoc Tuyen, from now until the end of the year, the consumer price index will not be as predictable as in the first half of this year because some pressures have appeared, such as the US-China trade war, African swine fever, and the continuous adjustment of prices of some goods and services.
Therefore, it was necessary to take synchronous and drastic measures to control inflation and stabilise prices, Tuyen said.
Le Quoc Phuong, former deputy director of the Ministry of Industry and Trade's Industry and Trade Information Center, said that inflation in 2019 could be kept lower than 4 per cent.
The Government needed to continue keeping a close watch on the supply-demand situation to take suitable solutions to stabilise the market, especially in terms of essential goods like pork, construction materials and petrol.
While the fiscal policy must be governed in a strict manner, the monetary policy needed to be flexible and coordinated with other macro-economic policies to keep inflation within the ceiling limit, Phuong said. — VNS
The African swine fever was named as one of the factors behind the slow rise of the CPI so far in 2019, despite the government’s flexible monetary policy and an increase in gas and electricity costs.
Vietnam recorded a year-on-year rise of over 2.7 per cent in consumer price index (CPI) in the first four months of this year, marking the lowest rate of increase seen in three years, according to the General Statistics Office.
Petrol price hikes in April were putting pressure on prices but the consumer price index (CPI) was still under the control, according to the General Statistics Office (GSO).