Keeping inflation below 4% is achievable: Deputy PM

Deputy Prime Minister Vuong Dinh Hue at the meeting held last week to better implement price management in the second half of the year. - Photo cafef.vn

Speaking at the meeting held to better implement price management in the second half of the year, Hue said that while managing the consumer price index (CPI), relevant ministries and agencies must keep track of and support the country’s economic growth target, and avoid triggering high inflation in the future.

To meet the goal, Hue said the ministries and agencies must keep abreast of demand and supply, and avoid imposing administrative procedures so that gradually, the price of essential public services can be modified based on the market price roadmap.

Hue instructed the State Bank of Viet Nam to devise monetary policies accordingly, and be flexible. These policies must complement fiscal policies to ensure inflation stays under check, he said.

The lending interest rate policy must be mapped out based on market development so as to support economic growth, he said.

The deputy PM has asked the Ministry of Industry and Trade (MoIT) to work in conjunction with the Ministry of Finance (MoF) to manage petroleum prices according to the market mechanism, under State management based on Decree 83/2014/ND-CP, with reasonable use of the petroleum pricing stabilisation fund.

The MoIT must also manage electricity price as per the PM’s instructions, Hue said. It must encourage investment in power production, at the same time considering the impact of input costs on production, consumption and people’s lives.

Hue also instructed the Ministry of Transport and MoF to monitor the collection of toll at Build-Operate-Transfer (BOT) projects and ports.

At the meeting, Hue appreciated the efforts made by all ministries and agencies in managing prices efficiently in the first half of this year.

Nguyen Anh Tuan, director of the MoF’s Pricing Management Department, said that the price of essential commodities declined gradually in H1, which will make price management easier in the second half of this year.

According to the General Statistics Office, Viet Nam’s CPI in June went down 0.17 per cent against the previous month, helped by the sharp fall in poultry and pig prices.

Previously, in May, the country reported the lowest CPI ever seen in May over the past decade, which declined 0.53 per cent against April.

Still, the index in the first half of this year posted a 2.54-per cent year-on-year increase and a 0.2-per cent rise compared to December 2016. Average CPI of the six-month period rose 4.15 per cent against the same period of 2016. Key drivers of the hike included higher hospital and tuition fees, and higher prices of some necessary items such as petroleum and oil products, said the office.

The finance ministry has forecast that there remains some pressure on pricing in the second half of 2017, owing to salary hikes from July 1 and possibly unfavourable weather conditions.