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Vietnam: Petroleum, rice price hike pushes April’s inflation
The Hanoitimes – Vietnam’s consumer price index (CPI) in the first four months of this year rose 2.8 percent year-on-year, mainly due to price hike of petroleum and food, the General Statistics Office (GSO) reported.
Compared with March, the index inched up 0.08 percent, GSO said, noting that prices of six out of 11 goods used to calculate CPI were up in the month, including transportation (1.18 percent); housing, water and electricity supply, and construction materials (0.18 percent); household equipment and appliances (0.09 percent); culture, entertainment and tourism (0.08 percent); education (0.06 percent); and medicines and medical services (0.02 percent).
Lower prices were recorded in food and catering services (0.18 percent), posts and telecommunication (0.08 percent), other goods and services (0.02 percent); apparel, headwear and footwear (0.01 percent). Beverage and cigarette prices stayed the same.
Do Thi Ngoc, Director of the GSO’s Price Statistics Department, attributed the CPI hike in April to higher domestic and exported rice prices, fuelled by higher demands from China and Southeast Asian countries.
Besides, petrol prices were also adjusted up, thus pushing CPI by 0.11 percent, she said, adding that flight and railway ticket prices moved up 0.76 percent and 2.55 percent, respectively. Meanwhile, prices of housing materials, electricity and water supply hiked a respective of 0.5 percent, 0.14 percent and 0.42 percent.
Prices of poultry and aquatic products curbed CPI growth due to abundant supply.
Gold prices moved up 0.47 percent month-on-month while US dollar prices were kept stable at around VND22,790.
According to the GSO, basic inflation (CPI exclusive of foodstuff, fresh food, energy, health care and education services) in the first fourth months this year stood at 1.34 percent, reflecting that monetary policy remains stable.
Experts have so far suggested relevant authorities to closely watch on inflation to timely take appropriate measures as it is under pressure to rise significantly next time.
According to the experts, the petroleum price is rising again while price of many services and necessary goods are also forecast to increase next time.
Economic expert Nguyen Tri Hieu said that it is a sign of concern as CPI in the first quarter increased higher than the same period last year.
According to Hieu, credit growth was significant by the end of last year, which has the latency to influence inflation in 2018. Besides, prices of some goods in 2018 increased higher over last year.
“Authorities should monitor the inflation closely to take appropriate measures, especially on the money supply. If inflation continues to increase in the coming time, money supply must be limited and credit must be also tightened as the country’s economic growth relies on credit,” Hieu said.
At a recent meeting of the Steering Committee on Price Management, GSO Director General Nguyen Bich Lam noted as there will be a significant divestment of state capital at large enterprises this year, the government should regulate the absorption of foreign capital to supply VND to the market appropriately, avoiding pressure on interest rates and exchange rates.
Previously, the National Center for Socio-Economic Information and Forecast also warned that high inflation rate from the beginning of the year would make it difficult for the government in controlling inflation next months. Accordingly, CPI in 2018 is forecast to be higher than 2017, which may affect consumer sentiment, reduce private consumption and strengthen the household saving trend, it said.
The government also admitted there will be pressures on price hike of some commodities in the remaining months of the year, however, it believed that the target to keep inflation below 4 percent is feasible.
To control inflation, Hue required ministries and sectors to follow the scenario of the CPI growth rate of 3.55 percent this year to take specific measures and solutions.
He affirmed that the government will accomplish the task of controlling the inflation rate to the set target with support of the experience in management and coordination in steering work over prices of commodities of ministries and sectors.
The State Bank of Vietnam was asked to run a flexible monetary policy, manage credit flow in both volume and quality, continue sterilized intervention measures on foreign exchange as well as put forth equitisation of state-owned enterprises.
The Ministry of Agriculture and Rural Development is directed to keep a close watch on the demand for agricultural products, helping stabilize the market and expand export markets. It should join hands with relevant ministries and branches to build prices of the non-public irrigation products and services.
Meanwhile, the Ministry of Industry and Trade in collaboration with the Ministry of Finance should manage the fuel stabilization fund in an efficient way and stabilize domestic oil and gas market. They must work to set up the special consumption tax for E5 petrol to encourage the trading of this bio-fuel product. In addition, media works should be given priority to raise public awareness of power savings.
The Ministry of Health should make careful adjustment in the medical services and study to issue a circular on bidding for pharmaceutical products procurement and management of medical supplies.
Evaluation on current tuition fees must be conducted by the Ministry of Education and Training and the Ministry of Labor, Invalids and Social Affairs.
Do Thi Ngoc, Director of the GSO’s Price Statistics Department, attributed the CPI hike in April to higher domestic and exported rice prices, fuelled by higher demands from China and Southeast Asian countries.
Besides, petrol prices were also adjusted up, thus pushing CPI by 0.11 percent, she said, adding that flight and railway ticket prices moved up 0.76 percent and 2.55 percent, respectively. Meanwhile, prices of housing materials, electricity and water supply hiked a respective of 0.5 percent, 0.14 percent and 0.42 percent.
Prices of poultry and aquatic products curbed CPI growth due to abundant supply.
Gold prices moved up 0.47 percent month-on-month while US dollar prices were kept stable at around VND22,790.
According to the GSO, basic inflation (CPI exclusive of foodstuff, fresh food, energy, health care and education services) in the first fourth months this year stood at 1.34 percent, reflecting that monetary policy remains stable.
Experts have so far suggested relevant authorities to closely watch on inflation to timely take appropriate measures as it is under pressure to rise significantly next time.
According to the experts, the petroleum price is rising again while price of many services and necessary goods are also forecast to increase next time.
Economic expert Nguyen Tri Hieu said that it is a sign of concern as CPI in the first quarter increased higher than the same period last year.
According to Hieu, credit growth was significant by the end of last year, which has the latency to influence inflation in 2018. Besides, prices of some goods in 2018 increased higher over last year.
“Authorities should monitor the inflation closely to take appropriate measures, especially on the money supply. If inflation continues to increase in the coming time, money supply must be limited and credit must be also tightened as the country’s economic growth relies on credit,” Hieu said.
At a recent meeting of the Steering Committee on Price Management, GSO Director General Nguyen Bich Lam noted as there will be a significant divestment of state capital at large enterprises this year, the government should regulate the absorption of foreign capital to supply VND to the market appropriately, avoiding pressure on interest rates and exchange rates.
Previously, the National Center for Socio-Economic Information and Forecast also warned that high inflation rate from the beginning of the year would make it difficult for the government in controlling inflation next months. Accordingly, CPI in 2018 is forecast to be higher than 2017, which may affect consumer sentiment, reduce private consumption and strengthen the household saving trend, it said.
The government also admitted there will be pressures on price hike of some commodities in the remaining months of the year, however, it believed that the target to keep inflation below 4 percent is feasible.
To control inflation, Hue required ministries and sectors to follow the scenario of the CPI growth rate of 3.55 percent this year to take specific measures and solutions.
He affirmed that the government will accomplish the task of controlling the inflation rate to the set target with support of the experience in management and coordination in steering work over prices of commodities of ministries and sectors.
The State Bank of Vietnam was asked to run a flexible monetary policy, manage credit flow in both volume and quality, continue sterilized intervention measures on foreign exchange as well as put forth equitisation of state-owned enterprises.
The Ministry of Agriculture and Rural Development is directed to keep a close watch on the demand for agricultural products, helping stabilize the market and expand export markets. It should join hands with relevant ministries and branches to build prices of the non-public irrigation products and services.
Meanwhile, the Ministry of Industry and Trade in collaboration with the Ministry of Finance should manage the fuel stabilization fund in an efficient way and stabilize domestic oil and gas market. They must work to set up the special consumption tax for E5 petrol to encourage the trading of this bio-fuel product. In addition, media works should be given priority to raise public awareness of power savings.
The Ministry of Health should make careful adjustment in the medical services and study to issue a circular on bidding for pharmaceutical products procurement and management of medical supplies.
Evaluation on current tuition fees must be conducted by the Ministry of Education and Training and the Ministry of Labor, Invalids and Social Affairs.
Source: http://www.hanoitimes.vn/economy/2018/05/81E0C5E4/petroleum-rice-price-hike-pushes-april-s-inflation/