Inflationary pressure eases with steady decline in CPI growth

06:00 | 31/08/2020 Economy

(VEN) - Following relatively sharp increases in the first half of 2020, inflationary pressure appears to be easing with a decline in the consumer price index (CPI), prompting optimistic forecasts about curbing CPI growth below the targeted four percent. 

inflationary pressure eases with steady decline in cpi growth
Consideration is being given to selling textbooks under the price stabilization program

At the July 2020 regular meeting of the Domestic Market Control Team, a representative of the Price Statistics Department of the General Statistics Office of Vietnam reported a 0.4 percent CPI growth in July compared with June. Contributing to the rise were goods and services related to transport, housing and building materials due to the impact of changes in petrol, oil and gas prices as well as the demand for electricity and water. The average CPI rose 4.07 percent year-on-year between January and July.

CPI growth has decreased gradually from 6.54 percent in January 2020 to the average of 4.19 percent in the first six months and 4.07 percent in the first seven months. “The CPI will increase slightly in August due to rises in petrol, oil, gas and electricity prices. However, pork prices are expected to decrease further due to increased imports. CPI growth in the first eight months is forecast to be lower compared with the first seven months, and the goal of curbing the annual inflation rate at below four percent is achievable,” the representative of the Price Statistics Department said.

Textbook prices

According to Phung Anh Ngoc from the Price Management Department of the Ministry of Finance (MoF), effective coordination between the Ministry of Industry and Trade (MoIT) and the MoF has helped stabilize domestic petroleum prices. The MoF has also coordinated with the Ministry of Education and Training to present a proposal to the National Assembly to add textbooks to the list of goods sold under the price stabilization program. “To achieve the annual target, it is necessary to keep CPI growth at 0.63 percent per month for the rest of the year, and this is achievable,” Phung Anh Ngoc said.

Experts believe pork prices will significantly affect CPI growth towards year’s end. Pham Van Duy from the Ministry of Agriculture and Rural Development’s Agro Processing and Market Development Authority said the ministry had increased live pig imports from Thailand in an effort to reduce domestic pork prices. An additional 15,500 breeding pigs have also been imported to prepare for repopulation of domestic pig herds decimated by African swine fever.

Deputy Minister of Industry and Trade Do Thang Hai, Head of the Domestic Market Control Team, praised ministries, sectors and business associations for their efforts to curb CPI growth. He said appropriate policies have been applied to stabilize prices of goods, including essential goods that affect people’s lives and production activities. “The prime minister, head of the National Steering Committee for Price Management, appreciated the coordination between the MoIT and the MoF in stabilizing petroleum prices,” he said.

Phuong Lan