VCN – This information was given at the workshop ‘Price, Market Development in Vietnam in 2022 and forecasts for 2023’ held on Tuesday January 4.
|The workshop. Photo: TL
Inflation control in 2022 reached the targets
2022 recorded a strong economic recovery in all aspects, the increase in demand for production to serve the country’s consumption and exports and the impacts of the world’s prices pushed prices of essential goods and services but the price level was still controlled.
Average CPI in 2022 and core inflation rose 3.15% and 2.59% year-on-year respectively. The price management and the inflation control reached the targets set out by the Government and the National Assembly (below 4%), said the Director of Price Management Department, Ministry of Finance Nguyen Minh Tien.
Mr. Tien said that to achieve this result, the Ministry of Finance as the Standing Price Steering Agency worked with the Ministry of Planning and Investment, State Bank of Vietnam and relevant ministries and agencies to actively forecast factors affecting inflation, build scenarios and solutions to manage price as well as regularly monitor price movements to report the Government and Prime Minister to have appropriate solutions to control inflation.
In addition, the Ministry of Finance has coordinated with other ministries and agencies to propose solutions to manage the prices of some essential goods, contributing to stabilizing the price level and reducing negative impacts on socio-economic development.
Assessing inflation in 2022, Dr. Nguyen Duc Do said the inflation rate in Vietnam was still much lower than the target of 4%. This is a low rate compared to developing countries, such as the US.
Mr. Nguyen Duc Do said this achievement resulted in redundant production capacity, so enterprises could not push up prices. This is a factor controlling inflation of some items such as food and food products as well as necessities.
Although the price level in 2022 was negatively impacted by the high increase in global petroleum and material prices, Vietnam offered solutions to control import inflation including maintaining USD/VND exchange rate (monetary policy); reducing green tax on petrol and oil (fiscal policy).
“Moreover, the Government controlled the price of some items such as health services, education, and electricity. The focus on cost factors is a difference leading to the effectiveness of the inflation control in Vietnam compared to many other countries in 2022,” said Nguyen Duc Do.
Inflation pressure will decrease in 2023
Entering 2023, it is forecast that the world economy will see slow growth, high inflation and the possibility of economic recession will become clearer, especially in major economies, expanding the risk of political and social instability in some countries; strategic and geopolitical competition between countries in the world will keep going; financial and monetary markets of developing countries face many risks; energy security, food security, natural disasters, epidemics, climate change, storms, floods, and droughts will continue to be issues of concern.
According to the leader of the Price Management Department, Vietnam’s economy heavily depends on imported materials, so the country may face import inflation before the increase in prices of materials and strategic products in the world market and exchange rate risk.
Furthermore, the pressure from the postponement of the implementation of the market price roadmap of some items managed by the State also imposed challenges for price management from the beginning of the year. And, support policies will have certain impacts on the price level.
However, Mr. Nguyen Duc Do said the pressures on inflation such as currency, exchange rate or material price might reach a peak in 2022 and will reduce in 2023. In fact, the inflation showed signs of decreasing in December 2022 when the core inflation only rose 0.33% from the previous month. But, the pressure of the increase in electricity prices and prices of other services managed by the State in 2023 will be higher than it in 2022 and its impacts will depend on time and price management of the State authority.
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“In the near future, inflation in Vietnam will tend to decrease after the peak thanks to the prudent monetary policy of the State Bank in 2022, as well as the risk of the world economy’s recession. Inflationary pressure in 2023 may come from the State’s adjustment of prices for health and education services as well as electricity prices. However, if the price adjustment is made in the second half of 2023 with an insignificant adjustment, the target of controlling inflation around 4.5% or even below 4% is completely feasible,” said Nguyen Duc Do.
By Thuy Linh/ Huyen Trang