3.7% is finance ministry’s worst-case inflation forecast

It put forth the two alternative scenarios at a meeting of the Steering Committee on Price Management chaired by Deputy Prime Minister Le Minh Khai on Aug. 3.

The consumer price index would rise by 3.2% depending on whether gasoline and gas prices decrease by 10% and those of some other goods and services increase by a certain rate, it said.

It would rise by 3.7% if fuel prices decline by less than 5% and others go up by a certain rate, it added. In July prices edged up by 2.06% year-on-year as the CPI rose by 3.12% for the year.

In a report the ministry said supply and prices of essential goods have not fluctuated abnormally this year and moved as expected by the committee.

Interest rates have gradually cooled, and exchange rates have become stable.

The central bank anticipates a 3.7% increase.

Khai instructed government agencies and local authorities around the country to ensure adequate supply of goods, especially food, foodstuffs, other consumer goods, and essential services. "Do not allow any shortages or disruptions in the supply of gasoline and oil."

Inflation last year was 3.15%, much lower than the average of 7.85% in Southeast Asia; developed countries reported double-digit figures.

But analysts warn that this year inflation will jump from there to developing countries.