A cautious approach in managing inflation could help ensure the consumer price index (CPI) staying below 3%.

While inflationary pressure has been a major risk for many countries around the world, Vietnam has put the issue under control, and unless unexpected things happen, it would stay well below the 4% target set for this year.
A customer at a Vinmart store in Hanoi. Photo: Cong Hung |
Nguyen Xuan Dinh, representative of the Price Management Department under the Ministry of Finance (MoF) gave his assessment at a conference jointly held today [July 2] by his department and the Academy of Finance.
The consumer price index (CPI), a gauge for inflation, expanded by an average of 1.47% year-on-year in the first six months of this year, the slowest growth rate since 2016, which Dinh attributed to the Government’s flexible management of monetary and credit policies.
Dinh, however, noted some factors are putting pressure on the market prices in the first six months, including hiking prices of input materials such as fuel, construction materials, and educational services.
Vice Director of the Institute of Economics-Finance (IEF) Nguyen Duc Do added a decline in domestic consumption as a result of the Covid-19 impacts limited inflation growth at 0.07% in June against the previous month.
“Low base of inflation and food prices helped offset impacts from increasing fuel prices and construction materials in the past months,” he added.
Do estimated in case the inflation keeps an average growing pace of 0.27%, the inflation rate in December 2021 could hit 3.28% year-on-year and 2.12% for the whole year.
However, assuming petroleum prices continue the surging trend and CPI expanding at an average rate of 0.5% per month, the inflation rate in December would be 4.71%, but the average inflation rate for 2021 would only be around 2.53%.
Economist Dinh Trong Thinh from the Academy of Finance gave two scenarios for CPI in 2021. For the first one as the pandemic stays serious and the global economy facing a slow recovering process, the inflation rate in 2021 would be around 3.3-3.5% with a GDP growth of 6.8-7% in the second half of this year.
In a more optimistic case, a GDP growth of 7-7.4% in the final six months would translate into an inflation rate of 3.8-4%, he noted.
Former Deputy Director of the Vietnam Industry and Trade Information Center under the Ministry of Industry and Trade Le Quoc Phuong said a cautious approach in managing inflation could help ensure the CPI staying below 3%.
“Government agencies should closely monitor prices of basic necessities and strategic input materials to avoid a sudden surge of prices,” Phuong said.
Phuong called for the Price Management Department to tighten credit flowing into risky fields that have been overheating in the past months, including real estate and securities.
Other News
- Vietnam's securities accounts surpass 5-million mark
- Finance ministry proposes extending tax payments worth US$870 million for domestic cars
- Foreign capital returns to Vietnam's stock market in 2022: SSI
- Vietnam’s easing monetary policy unlikely to reverse amid Fed’s rate hike
- Shinhan Financial to acquire 10% stake in Vietnamese e-commerce Tiki
- Banks cut lending rates to support businesses
- Gov’t aims at transparent, sustainable stock market
- KEB Hana Bank committed to long-term presence in Vietnam
- Corporate bond issuance in Vietnam declines sharply in Q1
- Vietnamese Gov’t shows commitments to ensure healthy development of stock market: Expert
Trending
-
Dream of a riverside city
-
SEA Games 31: Vietnam end group stage without conceding a goal
-
Vietnam’s business environment favorable for foreign investors: Warburg Pincus
-
FPT opens new office in New York, 10th in US
-
Vietnam’s e-commerce: driver for economic recovery in post-Covid-19
-
Vietnam, Qualcomm boost cooperation for 5G development
-
SEA Games 31 delegates get free Hanoi Bus Tour
-
Vietnamese PM meets American giant corporations in Washington
-
EC recognizes Vietnam's Covid-19 digital certificates