“Put the reins” of inflation | VTV.VN

Inflation is a problem many economies around the world have to face, especially big economies related to the conflict in Ukraine such as EU, US, UK… Inflation in many places has reached the highest level in 40 years and shows no signs of stopping.

Domestically, up to now, Vietnam is still controlling inflation well. However, experts said that the price of raw materials and input fuel, especially gas price continuously rising oil has been and is a huge challenge.

Since the beginning of the year until now, gasoline prices have increased 9 times, leading to many types of food, goods, and transportation costs.

Since the beginning of the year, gasoline prices have increased 9 times. (Photo: Investment Newspaper)

Domestic gasoline prices depend largely on world gasoline prices. While on average in the first 5 months of this year, the world oil price has increased by 60% over the same period in 2021.

According to calculations, if gasoline increases by 10%, inflation will increase by 0.36 percentage points and the economic growth scenario will decrease by 0.5 percentage points. The increase in gasoline prices also affects the prices of input materials such as fertilizers, animal feed, construction materials, etc., thereby affecting the whole economy.

On average, in the first 4 months of this year, gasoline prices have increased by 48.84% over the same period last year, ie accounting for 1.76 percentage points of the average inflation rate of 2.1% in these 4 months.

In addition to the direct impact of increasing product costs, the increase in gasoline prices also increases the prices of goods in circulation, puts pressure on inflation, reduces the competitiveness of domestically produced goods, and has negative impacts. to economic growth.

“Our economy depends quite a lot on imported raw materials from outside. That reduces the competitiveness of domestic goods and negatively affects economic growth and impacts on GDP growth. consumer price index CPI”, said Ms. Nguyen Thu Oanh, Director of the Price Statistics Department, General Statistics Office.

Currently, the Ministry of Industry and Trade has set up monthly and quarterly scenarios to control prices and ensure petroleum supply and reserves are always at 20% compared to normal. Among the taxes to calculate the base price for retail gasoline, the environmental protection tax rate has been reduced by 50% since the beginning of April.

“The ministry also mentioned the immediate review of the MFN tax, ie the most-favored nation tax rate, with a proposal to reduce it from 20% to 12%, but any reduction must be calculated to be harmonized in the process. The negotiation process with other countries, at the same time keeping the revenue ratio, encouraging supply diversification, but also creating a difference between the tax rates in the FTA market and the markets with MFN tax rates,” said Mr. , Director of the Domestic Market Department, Ministry of Industry and Trade, said.

Controlling inflation is the most important goal

The inflation control target this year has been set to be below 4%. Up to now, Vietnam is still in good control, although the pressure is great. In addition to raw materials, materials in the world tend to increase in price, after the epidemic, the increase in aggregate demand also makes prices fluctuate. Controlling inflation and controlling prices continues to be a top important task for Vietnam’s economy.

In the first four months of the year, the consumer price index (CPI) surpassed the 2% mark. While the inflation control target for the whole year is below 4%. Thus, there is not much room to control inflation according to the set target, especially in the context that many input commodities and fuels in the world are still increasing and standing at a high level.

“Inflation in Vietnam has so far been well controlled thanks to three reasons. Firstly, domestic demand is still recovering from the impact of the epidemic. Second, it is an effort to stabilize before the impact of prices. Third, food prices are relatively stable. However, inflationary pressures are still very large, as the escalation of world prices can push up production costs. vigilance and responsiveness to new price pressures The important thing in this period is the ability to predict and keep abreast of international and domestic price increases, how to limit fuel price increases but not massively increase other commodities”, said Ms. Era Dabla Norris, Asia-Pacific Department, International Monetary Fund.

Controlling inflation and controlling prices continues to be a top important task for Vietnam’s economy. (Illustration image – Photo: Investment Newspaper)

How to limit the increase in fuel prices and not let it massively increase other commodities, that is also a big challenge for the management to control inflation and control prices at this time. .

“We may still have room to reduce. Reducing gasoline prices and keeping inflation low, while stimulating the economy can bring in other sources of revenue besides gasoline and still ensure the target. State budget revenue”, Dr. Tran Toan Thang, Center for Socio-economic Information and Forecast, Ministry of Planning and Investment, said.

“We should consider the current tax reduction as an investment of the government for the economy and for businesses during this difficult period,” said Nguyen Bich Lam, former General Director of the General Statistics Office. determined.

In fact, not only Vietnam is facing rising inflation, but many countries around the world have been facing and accepting the reality of high inflation.

According to experts, in order to avoid the inflationary spiral, at this time, it is necessary to prioritize tight control of commodity prices, raw material and fuel prices, and regulate and coordinate policies to curb inflation.

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