CPI below 4% for 2018 is feasible: Deputy PM

Tuesday, 2018-05-29 17:49:02
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Deputy PM Vuong Dinh Hue, who is also Head of the Government’s Steering Committee on Price Management, speaks at the meeting. (Photo: VGP)
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NDO – The Government’s Steering Committee on Price Management has expressed an optimistic prediction for the consumer price index (CPI) increase to remain under 4% for the whole year, despite pressure from the price increase for several commodities.

>>> Vietnam’s CPI up 0.55% in May

Deputy Prime Minister Vuong Dinh Hue, who is also Head of the Government’s Steering Committee, chaired a meeting in Hanoi on May 29 to review price management and inflation control in the past months and orientations for the next periods.

The senior government official stated that the coordinated operation of price management by relevant authorities brought about positive results in the first four months of the year, helping to control the CPI increase within the scenario that his committee has mapped out since the beginning of 2018.

However, over the past two months, prices have risen in oil, pork, food (due to the increased demand for rice exports) and gas, along with the complexities of the world market, thus putting a lot of pressure on price management.

“The factors affecting prices recently have been forecast since the beginning this year, so we need to keep calm in coping with the situation to ensure that CPI for the whole year will increase at under 4%," Deputy PM Hue suggested, urging the Steering Committee’s members to focus on solutions to deal with outside fluctuations that affect domestic prices.

Deputy PM Vuong Dinh Hue expresses his optimism about the target to control CPI increase at below 4% for the whole year. (Photo: VGP)

According to Nguyen Anh Tuan, Head of the Price Management Department (under the Ministry of Finance), during the first five months of the year, price levels moved up relatively high in the first two months but slightly decreased in March, before increasing again over the next two months. On average, CPI (during Jan-May) increased by 3.01% over same period last year.

By the year end, the Ministry of Finance also predicted other factors that put pressure on the CPI, such as flood risks, the adjustment of prices of some items managed by the State, including health and education services, the increase in basic salary as of July 1, the adjustment of the environmental protection tax on fuel (increase by VND1,000 per litre of gasoline), among others.

However, other factors also help reduce the price pressure, such as the decreasing need for fresh food as forecast for the summer, the low price of vegetables due to favourable weather, the 10-15% reduction in drug prices following the organisation of a national centralised drug procurement, the 20% reduction in mobile call charges, and stable inflation, exchange rates, and interest rates.

Following the above assessment, the Ministry of Finance stated that the price adjustment from now until the end of 2018 would ensure the successful implementation of the inflation target at below 4% as set by the National Assembly.

Agreeing with the forecast, Deputy PM Hue said it is feasible to control CPI at below 4% for the whole year, adding that stabilising prices in June plays an important role for price management to the end of the year.

He asked the relevant ministries to keep prices stable for the State-managed goods and continue reviewing and accelerating the reduction of prices for potentially price declining products, such as medicines and medical supplies, while reviewing Build-Operate-Transfer toll stations that had finished financial settlement to reduce road service charges.