Vietnam’s inflation remains under control: Finance ministry
Fiscal policies such as tax cuts and freezing of payments have been supportive of the overall efforts of keeping inflation at bay.
Vietnam has succeeded in containing the inflation despite the high inflationary pressure on the economy, according to Deputy Minister of Finance Vo Thanh Hung.
|Deputy Minister of Finance Vo Thanh Hung. Source: MoF|
In the first quarter of 2022, Vietnam’s consumer price index, the main gauge of inflation, rose by 1.92% year on year.
According to Hung, such an expansion rate remains moderate taking into account the high inflation around the world.
“Fiscal policies such as tax cut and freezing of payment have been supportive to the overall efforts of keeping inflation at bay,” Hung told the local media.
In February, inflation in the US expanded by 7.9% year-on-year, the highest level seen in January 1982, while that in the UK rose to a 30-year high of 6.2% during the same month.
Countries in the Southeast Asian region also saw inflation go up in February.
On measures to curb rising inflation, Hung pointed out the National Assembly (NA)’s decision to cut the value-added tax (VAT) by 2% for services and goods, as well as further reduction in taxes and fees on other products, including a lower registration fee for domestic cars and an environmental protection tax cut on jet fuel prices.
In the latest move, the NA decided to slash the environmental protection tax on gasoline and petrol products by 50%, which directly led to a reduction of VND2,200 per liter of gasoline, and VND1,100 per liter of diesel, mazut, or kerosene products.
“It is estimated that total cut in taxes and fees would be around VND88-90 trillion ($3.8-3.9 billion),” Hung said.
In addition, the MoF is planning to propose a delay in the payment of taxes and land rental fees worth VND135 trillion ($5.9 billion) in the next nine months.
“This is seen as a loan with 0% interest rate for businesses so that part of their financial difficulties could be relieved,” Hung added.
To ensure the inflation stays within the 4% target set by the NA, Hung stressed the necessity for Vietnam to continue reducing the impacts of cost-push inflation; promote the aggregate supplies; ensure macro-economic stability.
“The MoF would continue to monitor the market situation, especially prices of key commodities for timely intervention if needed,” Hung said.
Principal Country Economist of the ADB in Vietnam Nguyen Minh Cuong told The Hanoi Times the Government’s recent cut in environmental protection tax on petrol products came at the right timing to relieve inflationary pressure on the economy.
“As room to further maneuver fiscal and monetary policies has been limited, price management is a key tool for the government, especially prices of petroleum products,” he said.
Cuong, meanwhile, noted a slowing global recovery, a surge in global oil prices due to the Russia-Ukraine conflict would directly affect Vietnam’s external trade and domestic oil prices, subsequently impacting inflation.
“Uncertainties in the global financial markets and the withdrawal of monetary and fiscal accommodation by advanced economies would weaken the dong, the local currency, rendering imports more costly and putting additional upward pressure on inflation,” he concluded.
ADB’s latest report on Vietnam’s economic outlook forecast that inflation would remain around 3.8% in 2022, within the target, and accelerate to 4% in 2023.
- Rising credit demand puts pressure on Vietnam's economy
- Visa, Google and banks launch Google Wallet today
- NA agrees to raise basic wage next July
- Vietnam excluded from US Treasury's monitoring list
- Vietnam’s Govt committed to supporting sustainable corporate bond market
- Vietnam’s budget revenue in 10 months exceeds year’s target
- Policy rate hike necessary to stabilize foreign exchange market: Central Bank
- Some 245 million e-invoices issued in Hanoi in nine months
- Vietnamese Government urged to raise base salary 6 months in advance
- Real estate transactions urged to be conducted via banks
Hanoi seeks cooperation with ASEAN cities for shared prosperity
MICHELIN Guide to feature Vietnam gastronomy for 1st time
WHO, FAO encourage people to take action for a healthier and safer Vietnam
Untold story of an ancient village in the heart of Hanoi
Vietnamese Gov’t to divest state capital at 141 businesses until 2025
Green growth an inevitable trend for Vietnam: PM
It's imperative for Hanoi to develop public transport: Experts
Calligraphy exhibition praises traditional cultural beauty of the nation
Australia funds electric vehicle infrastructure in Vietnam