National Assembly members asked government to rein in CPI

Vu Hong Thanh, chairman of the National Assembly Economic Committee, told the National Assembly that the committee “is now quite anxious about possible risks of high inflation this year due to a rise in the prices of electricity, petrol, and healthcare services.”

“High inflation will undermine macroeconomic stability and people’s livelihood,” Thanh said. “Thus, the government is requested to clarify the reasons behind the hike in the price of these services, and their possible impacts on the CPI and socio-economic development.”

National Assembly members expressed concerns about expectations of the rising price of foodstfuff in 2019

In the first four months of 2019, the average CPI climbed 2.71 per cent on-year, the lowest four-month rise over the past three years.

However, the core inflation, which is the change in the costs of goods and services, but does not include food and energy whose prices are much more volatile, increased by 1.84 per cent, exceeding the whole year target of 1.6-1.8 per cent.

“Meanwhile, the price of public services for 2019 will continue to be revised upwards under a price-increasing roadmap for the 2016-2020 period. This has caused great concerns about inflation pressure in the next quarters of the year and in the entire year,” Thanh said. “At the same time, the price of food in 2019 is likely to climb higher due to a reduction in supplies as the domestic livestock production sector has been heavily affected by epidemics.”

According to the Ministry of Industry and Trade, the average electricity selling price has risen by 8.36 per cent since March 20, 2019, expanding the CPI by 0.29 per cent in April.

Besides, from May 1, 10 medical examination services, six hospital bed services, and 1,937 technical and testing services at hospitals in Hanoi have also seen their prices increased.

Many National Assembly deputies like Nguyen Khac Dinh, Chairman of the National Assembly Legislation Committee, stressed that there is a big risk of high inflation this year.

“The price of services in healthcare, education, and schoolbooks are proposed to be increased. Quite often, at the beginning of the new school year [in July for colleges and universities, and September for schools], the price of the education group increases,” Dinh explained.

“Moreover, from July 1, 2019, the salary of state officers and those working in the army will increase prices in the remaining months of the year."

According to the government’s Decree No.38/2019/ND-CP dated May 9, 2019 on stipulating a minimum salary level for state officers and those working in the army, from July 1, 2019, the minimum salary will be increased to VND1.49 million ($64.78) per month from the existing VND1.39 million ($60.43) per month.

“Thus, there is a big risk for the CPI to ascend strongly this year. It is proposed that the government take proper solutions to regulate inflation,” Dinh noted.

Deputy Chu Le Chinh representing the northern province of Lai Chau said that he is quite anxious about high inflation this year.

“Market prices are on the increase, especially the price of electricity. At our meetings with constituents, they expressed deep concerns about growing prices,” Chinh said. “It is suggested that the government clarify the reasons behind the price hikes.”

Echoing this view, deputy Huynh Thanh Canh representing the south-central province of Binh Thuan said that people are now greatly interested in the rising price of electricity.

“They are anxious because this hike will surely raise the price of many items in the market, affecting their life,” he said.