The government of Vietnam is enforcing its efforts to curb soaring inflation by adopting comprehensive measures to increase essential goods supply, reduce costs and stabilize monetary market.
To tame soaring consumer prices, particularly after the Ministry of Finance hiked 31 per cent of gasoline prices to VND19,000/liter, the Ministry of Industry and Trade is requesting all provinces, cities and companies to quote selling prices.
The Ministry of Finance recently issued an urgent dispatch to ask municipal and provincial bodies to double efforts to control consumer prices, and remove any potential goods hoarding and speculation causing market turmoil based on any incidents such as natural calamity or epidemics, the Thoi Bao Kinh Te said.
The government also pledged that it will increase loans for farmers and fishermen to maintain effective existing production activities, particularly those in the Mekong Delta, the country’s rice bowl, which will make significant contribution to the fight against inflation.
Because food and foodstuff account for more than 40 per cent of Vietnam’s basket of goods based on which its CPI index is calculated. Besides, the government will increase import tax on luxury goods including automobile and gold to reduce trade deficit.
The Ministry of Health is asked to tighten state control over prices of medicines by requesting pharmacy firms to quote medicine prices and clamping down any illegal prices hikes, state media said.
Party Chief Nong Duc Manh Jul 30 had a meeting with Vietinbank, one of Vietnam’s leading state-owned banks, calling on the banking sector to shoulder burdens with the government to curb inflation.
Recently, big banks such as Agribank, BIDV and several others started to reduce borrowing costs for local production firms to enrich essential goods supply, a pivotal factor to successfully tame high inflation, which rocketed to 27 per cent in July on year, state media said.
“Market and prices management is a key tool to curb inflation,” PhD Vu Dinh Anh, dean of the Institute for Market Research and Prices Research said.
“The Vietnamese government should carefully list to economists in terms of economic restructuring with priority given to effective projects and tighten control on indirect foreign investment funds in order to avert any financial bubble bursting,” Tran Anh Vuong, vice chairman of the Hanoi Young Entrepreneurs Association said.
Alain Cany, chairman of the EuroCham said that despite European business community’s optimism about Vietnam’s economic prospect, they are really concerned about inflation by monetary factors.
Michael J.Peace, chairman of AmCham also worried about inflation by hiked salaries, which are harming the local business climate. Meanwhile, Martin Rama, Acting Country Director of World Bank said the entire world is facing inflation.
Nguyen Tien Thoa, head of the Ministry of Finance’s Price Management Department forecast that 31 per cent hikes of gasoline prices will push CPI to rise by 0.62 per cent. CPI is forecast to soar 1.8 per cent-2 per cent on month in Aug this year.
So far the government of Vietnam has cut VND41 trillion of public investment projects to curb inflation.
Vietnam has lowered its GDP growth rate to 7 per cent this year from the set 8.5 per cent-9 per cent. (Industry & Trade, Vietnam Economic Times)
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