The Government's policy of stabilizing the macro economy and controlling inflation will help strengthen the confidence of businesses and people in a stable macro-economic environment, thereby stabilizing inflation expectations.
Deputy Prime Minister Le Minh Khai speaks. (Photo: An Dang/VNA)
On the morning of June 12, Deputy Prime Minister Le Minh Khai, Head of the Steering Committee for Price Management, chaired a meeting of the Steering Committee to evaluate the results of management and operation in the first 6 months of the year and orient price management work in the remaining months of 2024.
In his opening remarks, Deputy Prime Minister Le Minh Khai said that in the first months of the year, commodity prices on the world market fluctuated due to the impact of many factors, the world economy recovered slowly, monetary policy continued to tighten, prices of essential goods (gasoline, gold) fluctuated strongly, affecting our country's economy.
Prices of goods and domestic markets follow the annual scenario, increasing at the beginning of the year due to the Lunar New Year, decreasing in March and stabilizing in the middle of the year, following the rules.
The Steering Committee has come up with many solutions, with the spirit of not being subjective or negligent. The meeting aimed to assess the price and market situation since the beginning of the year and forecast the situation in the coming time, on that basis, there are solutions to control inflation according to the target set by the National Assembly. The Deputy Prime Minister commented that with the CPI increase in May and the first 5 months of the year, market developments following the law, inflation can be well controlled.
10 groups of goods and services with increasing price index
The report of the Ministry of Finance - the standing agency of the Steering Committee shows that, on average, in the first 5 months of this year, the CPI increased by 4.03% compared to the same period in 2023. Of this increase, 10/11 groups of goods and services had price indexes increasing, 1 group of goods had price indexes decreasing.
Notably, the education group price index increased by 8.7% due to the fact that in the 2023-2024 school year, some provinces and cities increased tuition fees, causing the overall CPI to increase by 0.54 percentage points.
The price index of the group of drugs and medical services increased by 6.87%, causing the overall CPI to increase by 0.37 percentage points due to the adjustment of medical service prices according to Circular No. 22/2023/TT-BYT of the Ministry of Health from November 17, 2023.
The price index of the housing and construction materials group increased by 5.49%, causing the overall CPI to increase by 1.03 percentage points, due to the increase in prices of cement, iron, steel, and sand following the increase in input materials and housing rental prices. The price index of the culture, entertainment, and tourism group increased by 1.6%, causing the overall CPI to increase by 0.07 percentage points.
In contrast, the price index of the postal and telecommunications group in the first 5 months of 2024 decreased by 1.46% compared to the same period last year due to the decrease in prices of old generation phones when businesses applied discount programs to stimulate demand for smartphones launched on the market after a period of time.
In order to stabilize the macro economy, control inflation according to the targets set by the National Assembly and implement the roadmap for market prices of public services and goods managed by the State, the Government, the Prime Minister, the Deputy Prime Minister - Head of the Steering Committee for Price Management have directed ministries, branches and localities to resolutely implement many macroeconomic solutions such as ensuring smooth supply, circulation and distribution of goods and services, especially for strategic goods such as gasoline, electricity, strengthening logistics connections to promote consumption and export of agricultural, forestry and fishery products.
Information from the representative of the Ministry of Industry and Trade shows that the Ministry always closely monitors market developments and commodity prices and closely coordinates with ministries, branches and localities to well organize information work on price forecasting and situation assessment.
Gasoline prices are always fluctuating. From the beginning of the year to April 2024, gasoline prices have always increased, but in May and June 2024, they have tended to decrease. The decrease in crude oil prices has led to a decrease in the prices of most gasoline products. The price of R92 gasoline - a popular consumer product - is now close to the price in the same period in 2023. The impact of gasoline products on the macro economy is insignificant.
Since the beginning of the year, the Ministry of Industry and Trade has always closely coordinated with the Ministry of Finance in managing gasoline prices. With the current 7-day management, the price difference between the two adjustments is not large and therefore, businesses are proactive in planning gasoline imports. Currently, gasoline inventories are 1.8 million tons; in the second and third quarters of 2024, gasoline supply will basically meet market demand.
Regarding electricity, the representative of this Ministry explained that the average retail price will be adjusted in 2023, the current electricity price is 2,006.79 VND/KWh. To complete the average retail electricity price plan according to Decision 05/2024/QD-TTg of the Prime Minister, it depends on the inspection of the cost of electricity production and business in 2023 and the development of a circular guiding the calculation of the average retail electricity price.
Currently, the Ministry of Industry and Trade is coordinating with relevant ministries and branches to urgently check the cost of electricity production and business in 2023. The Ministry is developing a circular guiding the calculation of average retail electricity prices according to Decision 05, which has been posted on the website and widely solicited for comments. The circular is expected to be issued in August 2024.
When these two contents are completed, the Ministry of Industry and Trade will have a basis to direct the Vietnam Electricity Group (EVN) to complete the average retail electricity price plan and submit it to the Government.
Inflation expectations may rise due to wage reform
Forecasting a number of factors that will put pressure on the price level in the remaining months of 2024, Deputy Minister of Finance Le Tan Can said that implementing the market price roadmap and correctly and fully calculating costs in the prices of goods and services priced by the State will continue to be an issue that needs to be considered and implemented in 2024 after initially being implemented in 2023, but at a low level, in a "restrained" manner.
Specifically, regarding the price of educational services, tuition fees for the 2023-2024 school year and the following years of public preschool and general education institutions that are not self-sufficient in regular expenditure will continue to be kept stable at the level of the 2021-2022 school year, so in 2024, there will be basically no impact on the general CPI.
For public higher education and vocational education, from September 2024, tuition fees for the 2024-2025 school year will be applied according to the ceiling in Decree No. 97/2023/ND-CP (compared to the previous school year, the ceiling tuition fees for higher education increased by an average of 14%, and for vocational education by an average of 6%). Although the ceiling tuition fees have been adjusted to increase, the actual impact on CPI depends on the specific tuition fees decided by educational institutions.
The adjustment of electricity prices as proposed by the Ministry of Industry and Trade at the beginning of the year to ensure that it reflects fluctuations in input costs of electricity prices, while extreme weather events and forecasts of a sharp increase in electricity demand for production and consumption in the coming time will also put pressure on inflation. When the household electricity price index increases by 10%, it will impact the CPI to increase by 0.33 percentage points.
Domestic airfares of airlines in the coming time are forecasted to increase compared to the previous period, following the general trend of airfares in the world due to the shortage of aircraft, increasing fuel costs, shortage of high-quality human resources, pressure from the increase in the exchange rate of USD compared to the domestic currency, armed conflicts in some countries and regions affecting the supply chain of products, materials, and equipment in the aviation industry, and may change and prolong the schedules and routes of flights...
In addition, prices of essential raw materials, goods and consumer services such as energy, construction materials, etc. are forecast to fluctuate, putting pressure on inflation. Implementing public sector salary reform in the spirit of Resolution No. 27/NQ-TW and increasing the minimum wage for the business sector from July 1, 2024 may increase inflation expectations, leading to an increase in prices of consumer goods and services.
The factor that helps reduce pressure on price levels pointed out by the Deputy Minister of Finance is that global inflation may cool down in 2024, which can help Vietnam reduce pressure from the "imported inflation" channel, while helping to improve psychological factors and expectations, supporting inflation control in 2024.
Domestic agricultural production is expected to continue to develop favorably, with abundant food supply and proactively meeting domestic consumption and export demand, which are important factors in reducing pressure on prices.
Some tax support policies in 2024 will continue to be applied similarly to 2023, such as reducing environmental protection tax on gasoline and oil, expected reduction of VAT on some goods and services... contributing to reducing the cost of forming prices of gasoline and oil and goods and services.
The Government's policy of stabilizing the macro economy and controlling inflation in recent years will help strengthen the confidence of businesses and people in a stable macro-economic environment, thereby stabilizing inflation expectations./.
Source : https://www.vietnamplus.vn/cung-co-niem-tin-cua-nguoi-dan-doanh-nghiep-on-dinh-ky-vong-lam-phat-post958710.vnp
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