Four percent CPI growth for 2019 said to be feasible

Petroleum prices are being managed according to existing regulations

According to Do Thi Ngoc, Director of the Price Statistics Department of the General Statistics Office of Vietnam, falling prices of many kinds of goods and flexible state management have helped put the July CPI under effective control, below the forecast level.

Specifically, rice prices were low throughout the first half of the year and increased in early July. Gas prices recently were reduced by VND19,000 per cylinder. The price of imported fully assembled cars also plunged.

Despite complicated changes in the global market, petroleum prices in the domestic market increased at lower rates compared with rises in global prices. Hoang Anh Tuan, Deputy Director of the Domestic Market Department of the Ministry of Industry and Trade said that petroleum prices were being managed according to global trends. However, the petroleum price stabilization fund will be used flexibly to help minimize fluctuations in petroleum prices and stabilize the price of consumer goods.

The August CPI will be affected by factors such as periodic petroleum price increases in late July, forecast increases in pork prices due to insufficient supply, increases in the price of education and medical services, and electricity price increases in July. “Despite all these factors, the CPI is forecast to grow a mere 0.2-0.3 percent in August,” Do Thi Ngoc said.

Deputy Minister of Industry and Trade Do Thang Hai said Vietnam could feel secure about the August CPI and that of the whole year of 2019. However, he added, it is necessary to ensure sufficient supply of goods during the months towards year’s end to serve higher consumer demand. The outbreak of the African swine fever has affected pig herds in 62 provinces and cities nationwide, leading to supply shortages. Therefore, ministries and sectors need to coordinate to encourage pig breeding in areas where the epidemic has been stopped, while at the same time promoting the import of other kinds of meat in order to prevent insufficient supplies towards year’s end.

According to Tran Duy Dong, Director of the Domestic Market Department, if petroleum prices are maintained at present levels, the CPI will increase about 0.05 percent, according to a scenario created by the General Statistics Office of Vietnam. Therefore, the Ministry of Industry and Trade and the Ministry of Finance need to keep a close watch on the world market situation and use the petroleum price stabilization fund flexibly to prevent major CPI changes.