Government set to curb inflation

The Government would implement measures to curb inflation while ensuring economic growth, said Finance Minister Vu Van Ninh.
The Government would implement measures to curb inflation while ensuring economic growth, said Finance Minister Vu Van Ninh.

The minister was responding to concerns that inflation for all of 2010 might surpass the National Assembly's limit of 7 percent.

Vietnam's consumer price index (CPI) rose 0.75 per cent in March over the previous month and 9.46 percent over the same period last year, reported the General Statistics Office (GSO).

First quarter CPI rose an unexpected 4.12 percent.

The minister said Government measures would include consistent market pricing policies to avoid irrational pricing and curb inflation while ensuring economic growth.

The minister told a Vietnam News Agency reporter that the Government would continue to effectively control goods and services while encouraging price competition.

According to Nguyen Duc Thang, deputy director of the GSO's Trade and Pricing Department, the sharp increase in CPI during March is attributed to the rise in the price of essential items, including electricity, coal, petrol and steel.

"These are important inputs for many industries," said Thang.

In addition, traditional price increases during the Lunar New Year were not followed by the usual fall in prices after the end of the holiday period.

Rising petrol prices had an impact on transportation and freight charges, which saw an increase of 0.92 percent, the highest increase during the last five years.

The recent adjustment in the exchange rate for the US dollar and Vietnamese dong by the State Bank of Vietnam has also made the inputs for many domestic producers more expensive, with producers now relying more on imported raw materials.

Economists say that when the country has fully integrated into the world economy, prices of many essential goods will gradually conform to the market economy.

Fiscal policy would be managed in a flexible and careful manner to ensure liquidity in the economy. Payment methods and outstanding credit loans would be put under close control, said Ninh.

"The ministry has asked the Government to require economic groups and State corporations to conduct price stabilisation measures to ensure demand for production and consumption while curbing inflation and ensuring social welfare," he said.

Regarding the continuous increase in petrol prices, Ninh said the ministry had guided petrol trading companies in widening the intervals between price increases.

"To stabilise the market, the ministry will also work with relevant ministries and agencies to ease difficulties for businesses, to improve the business climate and review irrational expenses with a view to saving costs for businesses," said Ninh.

"Businesses are also required to make efforts to renew their technology and more efficiently use energy, in a bid to offer more competitive prices to consumers.

"Electricity and coal prices should be stabilised by the end of this year as required by the Government "./.

See more