Abundant domestic supply of necessities is one of the reasons Vietnam controls inflation well. Photo: Internet
By the end of 2022, economic indicators have been “on the right track” set by the Party, National Assembly and Government. In particular, inflation is still around 4% and is not under strong upward pressure like some other developed economies.
Due to the Covid-19 pandemic and subsequent impacts of the conflict between Russia and Ukraine, energy and food prices skyrocketed globally. Inflation has become a common story in many countries. However, for Vietnam, inflation is currently well-controlled thanks to an active, flexible monetary policy and self-control in the supply of basic necessities in the country.
Media representative of the International Monetary Fund (IMF) Pemba Tshering Sherpa assessed that Vietnam’s inflation was lower than that of most countries in the region. Recently, inflation was mostly limited to certain goods such as fuel and to fuel-intensive services such as transportation. Consumers are largely unaffected by rising food prices globally as domestic supplies are plentiful, pork prices are down from last year’s highs, and rice remains cheaper than wheat and other different grains.
According to Ms. Sherpa, the reduction of environmental tax and other taxes and fees on petroleum products (preferential import tax, excise tax) helps to reduce the impact of rising world oil prices on Vietnamese households and businesses. Besides, the freezing of prices for some services such as electricity, health care and education also contributes to keeping inflation under control.
An expert once compared: “growth can make you rich, inflation is an invisible pickpocket always with you”. Indeed, in the context of the world’s current complicated political-economic situation, flexible and adaptive decisions to each stage of the economy have helped to clear bottlenecks and energize the people at the right time, and in the right place.
Persevering in pursuit of goals
At the 4th session of the 15th National Assembly, Prime Minister Pham Minh Chinh reported to the National Assembly and voters nationwide on the results of the implementation of the socio-economic development plan in 2022 and expected in 2023. Accordingly, with the 2023 plan, the Prime Minister said, the Government set 15 targets, mainly in the fields of socio-economic and environment. In which, GDP growth is about 6.5%; the inflation target is 4.5%.
In 2022, to be able to control inflation, the Government has implemented many solutions, including drastic financial solutions such as relaxation, reduction of taxes and fees, reduction of environmental protection tax on petrol, oil, etc. continue to postpone the increase in prices of medical and educational services.
However, the problem is that we can not postpone the increase or decrease of taxes forever because it will affect the balance of national budget revenue – expenditure.
According to many experts, the inflationary era is over due to the scarcity of goods when for many years now we have been able to make a profit, have food to eat, that is, not only consume the domestic market of nearly a hundred million people but we also export many key products such as agriculture, forestry and fishery.
This will help strengthen confidence in the Government’s goal of controlling inflation and stabilizing the macroeconomy. This belief will neutralize the pressure to achieve the inflation control target in 2023 as planned.
The government should continue to persistently pursue the goal of macroeconomic stability as it did in 2021 and 2022. It is necessary to strictly control the implementation of public investment projects in the direction of absolutely not implementing projects with low spillover, focusing on large-scale projects and minimizing implementation time. In addition, it is necessary to develop plans with buffer zones to cover in case inflation flares up on a global scale.
Along with that, experts also made recommendations that, in the face of unpredictable developments of inflation, businesses and each individual need to have their own solutions to minimize the level of inflation. minimal negative effects. Saving production costs, avoiding high inventory levels are solutions that businesses can implement immediately. In addition, for new projects, businesses need to consider mobilizing capital from the stock market instead of banks to avoid the risk of increasing production and business costs. As for the people, it is necessary to limit as much as possible the borrowing of capital for long-term consumption purposes.