At the Workshop on market price developments in Vietnam in the first 6 months of the year and forecast for the whole year 2014 held on June 30, Ms. Ngo Thi Anh Duong, Deputy Director of Price Statistics Department, General Statistics Office, commented on inflation.
According to Ms. Duong, inflation in the first months of the year was low but to some extent was not stable because many items still had to be adjusted according to the roadmap.
`There are still many items such as health services and education managed by the State that continue to be adjusted by provinces and cities according to plans so that by 2018 there will be public service prices according to the market mechanism. Besides
Experts say that fluctuations in gasoline and electricity prices can threaten the CPI.
Expert Ngo Tri Long also said that product groups being managed by the State are the main factors affecting CPI, showing that management must be extremely cautious.
`In the coming time, it is necessary to implement the market price roadmap for a number of goods and services mentioned in the Government’s report such as gasoline, electricity, public services in education and health…
The consumer price index in the first 6 months of 2014 increased by 1.38% compared to the end of 2013, equal to one-fifth of the year’s target, the lowest increase over the same period in the past 13 years since 2002.
Regarding inflation in 2014, Mr. Nguyen Duc Do – Deputy Director of the Institute of Financial Economics commented that it will most likely be at 4%.
`In the next 6-12 months, inflation, on an annual basis, will be in a gradually increasing trend and may reach a bottom of 3% in 2015, if investment regains its recovery trend. In case
Ms. Duong forecasts that Vietnam’s inflation rate will continue its low increasing trend at 5% in 2014 and 6% in 2015.
At the conference, experts also said that domestic and foreign purchasing power is increasing slowly, so most domestic businesses still have difficulty in output for goods and services.
Mr. Pham Xuan Hoe, Deputy Director of the State Bank’s Monetary Policy Department, said that increasing credit in the last months of the year is not easy.
Only if the recovery speed and quality of the economy are good will promote lending.
`State-owned enterprises are looking for ways to reorganize and restructure. The debt ratio of private enterprises is quite high. So in both of these areas, capital absorption capacity is poor. In particular, the FDI sector is not
Therefore, according to the Deputy Director of the Monetary Policy Department, to revive purchasing power, in addition to solutions to stimulate demand, there also need to be solutions to increase the capacity of businesses and boost supply.