2:55:28 PM | 3/13/2008
The government of will not allow the inflation to exceed 20% this year, the Vietnam Investment Review under the Ministry of Planning and Investment cited Jonathan Pincus, chief economist for the United Nations Development Program as saying.
The real question for the government is how to build institutions to respond quickly and appropriately when changes occurred with the world’s economy, and the central bank needs restructuring to become more effective and transparent, Jonathan Pincus noted.
“The government has to tackle new problems that it has not dealt with before,” he said and pointed out that “the biggest challenge for is to solve the problem with a lack of coordination among ministries and agencies.
“The result is that inflation is not going down,” he said.
The central bank should be cautious to cause hiccups such as increasing the required reserve, forcing banks to buy bonds and controlling dong by not buying dollar, the UNDP chief economist said.
Recently, Prime Minister Nguyen Tan Dung issued a series of measures to tame double-digit inflation that is negatively impacting the country’s socioeconomic development, the newspaper said.
Dung asked the central bank to continue applying the tightened monetary policies including forcing local commercial banks to buy bonds and controlling credit growth below 30%. The government will reduce state budget expenditure and delay non-crucial state budget-financed projects.
’s consumer prices soared 3.56% in February, compared with January. In the January-February period, inflation rate was 6.2% from December. ( Investment Review)
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