Controlling CPI surge in accordance with targets

Concerning the first ten months of the year, CPI went up 2.27% and core inflation grew 1.82% against the same period of 2015. The CPI growth rate of 2.27% in the period is still far away from the CPI surge target of 5% set for the year, which provides a foundation for the price regulating team’s assessment confirming that the situation remains under control.

From the beginning of the year, abundant and various supply sources of essential commodities have led the prices of these goods to not increase remarkably as seen in past years. In addition, ministries, sectors and localities have also worked closely and proactively together in taking synchronous measures to stabilise the market and control inflation inaccordance with the target envisaged by the government, including strengthening market management and completing the system of goods distribution and circulation towards reducing intermediaries. It can be said that flexible and proactive price regulation methods in the opening months of the year have kept the CPI stable.

However, as analysed by the price regulating body, the remaining months will see a number of elements have an affect on the price index. The CPI escalation in October has shown that it is still necessary to maintain flexible price regulation and ensure strict rules in order to stabilise the consumer prices for the whole year. To do so, the monetary policy must continue to be operated flexibly and synchronously aiming to regulate the money supply reasonably and keep deposit rates steady, thereby alleviating pressure on lending rates. Also, credit growth needs to be maintained appropriately in line with directions set at the beginning of the year, focusing capital on the priority fields, thus providing better support for economic growth.

Furthermore, the government’s decision to maintain retail power prices and stabilise petroleum prices to curb price increases from affecting inflation, is also one of the effective and practical measures which are welcomed and supported by both the business community and consumers. However, ministries, sectors and localities should keep proactively monitoring the domestic supply and demand situation and the proceeding of domestic market prices of essential commodities so as to form proper regulation solutions. Monetary measures must be worked out to facilitate businesses access to preferential capital sources aiming to reduce costs and lower product prices, thus giving a boost to production and ensuring sufficient sources of goods for the domestic consumption market.

At a recent meeting, leaders of the government insisted ministries and sectors take precaution and careful consideration while avoiding the adjustment of education, health and petroleum prices in the last months of the year, in order to minimise the synergic impacts on the general price level. Concerning the issuance of a management mechanism over the fees converted into the price mechanism from January 1, 2017, ministries, sectors and localities need to promptly direct capable units to build and evaluate price measures and promulgate prices to be applicable right after the law on charges and fees takes effect. With regards to the price of medicine, the government has asked the Ministries of Finance and Health and the Vietnam Social Security to actively implement bidding in order to lower costs. The ultimate goal is to keep price increases at about 5% as envisaged by the government.