Prevent inflation, prevent price storms

The inflation trend of many major economies in the world such as Europe and the US is increasing. Recently, U.S. Federal Reserve (Fed) strongest in two decades and will also continue to raise interest rates this year in an effort to contain inflation.

In that context, at the end of the first four months of this year, Vietnam successfully controlled inflation thanks to the Government’s proactive direction and drastic direction from ministries, branches and localities to synchronously implement many solutions to stabilize prices, limit negative effects on socio-economic development.

Policies were issued in a timely manner, significantly reducing pressure on the price level such as reducing 2% value-added tax on some groups of goods and services from February; reduce the collection of 37 fees and charges in the first 6 months of the year; 50% reduction of environmental protection tax on gasoline from April.

A report from the General Statistics Office said that the consumer price index (CPI) in April increased by 0.18% compared to March and increased by 2.09% compared to December 2021, and increased by 2.64% compared to the same period last year. with the same period last year. Thus, the average CPI in the first four months of 2022 has increased by 2.1% over the same period last year and is higher than the increase of 0.89% in the first four months of 2021. Up to 9 groups of goods and services increased. price.

Although still well controlled, up to this point, inflation pressure is increasing and putting more pressure on the domestic consumer price index. Especially when the price of raw materials of many commodities in the world tends to increase. Supply chain and aggregate demand also increased after the epidemic, which also made prices fluctuate, while there was not much room for inflation below 4%. Therefore, controlling inflation and curbing prices is a big challenge for the domestic economy.

Controlling inflation and curbing prices is a big challenge for the domestic economy. Illustration.

There is not much room left to control inflation below 4%

In the first 4 months of the year, the consumer price index (CPI) has surpassed the 2% mark, while the inflation control target for the whole year is below 4%. Thus, there is room for control inflationary According to the set target, there is not much left, especially in the context that many input materials and raw materials in the world still stand at a high level.

“Inflation in Vietnam has so far been well controlled thanks to three reasons. Firstly, domestic demand is still recovering after the impact of the epidemic. Second is efforts to stabilize before the impact of prices. Third, food prices are relatively stable, but inflationary pressures are still very large because the escalation of world prices can push up production costs. We need to be very careful. sensitive and responsive to new price pressures The important thing in this period is the ability to predict and keep abreast of international and domestic price increases. a massive amount of products”, said Ms. Era Dabla Norris – Asia Pacific Department, International Monetary Fund.

How to limit the increase in fuel prices and not let it massively increase other commodities – that’s also a big challenge for inflation control and price control at the moment. .

Ms. Nguyen Thu Oanh – Director of the Price Statistics Department, General Statistics Office said: “Our economy depends a lot on imported raw materials from outside. That reduces the competitiveness of goods in the country. country, negatively impacting the growth of the economy and affecting the CPI”.

“There may be room for us to continue to reduce. Lowering gasoline prices and keeping inflation low to stimulate the economy will bring in other sources of revenue besides gasoline, thereby still ensuring a stable income. State budget revenue target”, said Dr. Tran Toan Thang – Center for Socio-Economic Information and Forecast, Ministry of Planning and Investment.

In the first 4 months of the year, the consumer price index (CPI) has surpassed the 2% mark, while the inflation control target for the whole year is below 4%. (Illustration – Photo: PLO)

In a recent statement, the IMF Asia-Pacific region emphasized that the continent is facing the risk of stagnant inflation with inflation forecast in Asia to increase by 3.2% in 2022. much higher than previously forecast, and downgraded Asia’s growth forecast to 4.9%.

In general, Vietnam’s recovery momentum became stable. Most importantly, the pillars of economic growth have rebounded quickly with the rapid and effective absorption of support and socio-economic stimulus packages. However, the problem now is that the pressure of consumption of goods, services and investment will increase. One of the immediate priorities is to continue to promote control of prices, markets and ensure the circulation of goods, reduce costs, as well as promote domestic production to move towards self-reliance in the supply of raw materials, fuels, and raw materials. domestic materials, thereby limiting the impact of world price increases on Vietnam.

If compared with other countries in the world, how will Vietnam’s inflation pressure come here? Is there still room from fiscal and monetary support packages for us to restrain the impact of inflation and increase prices?

Around the above issues, the program Events and Comments with the participation of Mr. Nguyen Minh Cuong – Chief Economist of the Asian Development Bank (ADB) in Vietnam and Mr. Nguyen Bich Lam – former General Director of General Statistics Office – analyzed and commented. Specifically!

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