GSO head points to factors affecting Vietnam’s efforts to curb inflation

By VNA   July 3, 2023 | 06:08 am PT
GSO head points to factors affecting Vietnam’s efforts to curb inflation
A vendor is seen at a market in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
An 20.8% increase in the base salary for civil servants, public employees, and members of the armed forces from July 1 will lead to rises in prices of goods and services, which may put a pressure on curbing 2023’s inflation.

In an interview granted to the Vietnam News Agency, General Director of the General Statistics Office (GSO) Nguyen Thi Huong said that the Vietnam Electricity (EVN)’s possible increase of electricity prices, the Government’s programmes to support economic recovery and step up public investment disbursement, and the recovery of tourism may also affect the price level in the remaining months of this year.

Regarding factors affecting 2023’s consumer price index (CPI), she said that Vietnam’s import of many kinds of materials whose prices are at a high level will put pressure on businesses’ production, thus pushing up prices of domestic consumer goods.

The adjustment of service prices managed by the State in the direction of correctly calculating all factors and costs into prices of medical and educational services will have a strong impact on CPI, stated Huong.

In addition, prices of food, foodstuff, beverages, garment and textiles, equipment and household appliances often increase in the last months of the year and ahead of the New Year holidays. Natural disasters and epidemics can affect food and foodstuff prices in some localities, which will also make the index increase, she added.

In order to control inflation to reach the target set by the National Assembly, the GSO proposes the Government, ministries, sectors and localities closely monitor price and inflation movements in the world, and promptly warn about risks to domestic prices and inflation in order to take appropriate response measures to ensure supply and stabilise domestic prices.

Ministries, sectors and localities need to prepare adequate supplies of goods, especially food and essential consumer goods and services, to ensure meeting people's needs.

For petrol products, it is necessary to ensure the domestic supply of petrol and diesel, and at the same time control the price of input materials and increase the use of domestic raw materials to gradually replace imported sources.

In addition, the Government needs to select the appropriate level and time to adjust prices of services managed by the State to prevent the resonance of cost-push inflation and inflation expectations.

The Government also should continue operating the monetary policy proactively, flexibly and cautiously, in combination with the fiscal policy and other macroeconomic policies to control inflation. In particular, it is necessary to ensure adequate and timely supply of credit capital for the economy, Huong said.

The GSO head also suggested ministries and branches to step up communication work in order to provide timely and transparent information, create consensus in public opinion on the Government's price management, and stabilise consumers' psychology, and stabilise inflation expectations.

According to Huong, Vietnam successfully curbed inflation in the first half of 2023. Compared to other countries, Vietnam is not in the group of countries with high inflation when its inflation in June increased by 2% over the same period last year.

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