On January 4, in Hanoi, the Institute of Finance and Economics (Academy of Finance) coordinated with the Price Management Department ( Ministry of Finance ) to organize a workshop on Market and price developments in Vietnam in 2023 and forecasts for 2024.
Speaking at the workshop, Deputy Director of the Institute of Finance and Economics - Dr. Nguyen Duc Do said that inflationary pressure is not expected to be high because the world economy, especially the US and China, is expected to grow more slowly, while the risk of the US economy falling into recession has not been ruled out.
Along with that, with the world economic outlook not really optimistic, oil prices could even fall sharply if the US economy falls into recession. It is forecasted that WTI oil prices in 2024 will revolve around the 5-year average of the 2019-2023 period of 67 USD/barrel.
In the context of slowing global economic growth, Vietnam's exports in 2024 are also forecast to grow moderately. Moreover, as the real estate market is still in a difficult period, the industrial - construction sector and the entire economy will also be affected and grow slowly in 2024. If GDP growth in 2024 is only around 6% as many forecasts, in the 2020-2024 period, GDP will only grow by an average of 4.64%, meaning that the economy in 2024 will still operate below its potential. This is a factor that restrains inflation.
Therefore, Dr. Nguyen Duc Do forecasts inflation in 2024 with many scenarios, in the high scenario it will increase by about 3.5%; in the low scenario CPI will increase by about 2.5% and forecast CPI in 2024 will be around 3%.
Also at the workshop, economist Dinh Trong Thinh commented that inflation will tend to be more favorable in 2024. It is forecasted that if oil prices and raw material supplies increase, inflation in major economies remains high, the world economy recovers slowly, Vietnamese enterprises take advantage of opportunities from free trade agreements, and Vietnam's economy can grow at 5.5-6.5%, then the possibility of inflation for the whole year will be around 3.2-3.5%.
“If crude oil, raw materials and materials prices fluctuate at the current level or lower, the chances of countries fighting inflation are better, the world economy recovers better than forecasted at the beginning of the year, economic recovery and growth support packages are effective, Vietnamese enterprises take advantage of opportunities and major changes in the world economy, continue to boost exports and imports, the tourism and service sectors grow strongly, public investment disbursement reaches a high level, then the possibility of inflation for the whole year could be from 3.5-3.8%,” said economic expert Dinh Trong Thinh.
According to Associate Professor Dr. Ngo Tri Long, the Government has experience in managing prices of strategic goods and services, and with aggregate consumer demand showing no signs of improvement, the target of controlling inflation in 2024 from 4% - 4.5% approved by the National Assembly is completely feasible.
However, there are still some factors that put pressure on inflation, such as forecasts of high growth returning in some countries, leading to increased inflation; forecasts of CPI increase due to adjustments in prices of state-managed services in the direction of correctly and fully calculating all factors and implementation costs into prices of medical services and education tuition; salary increase from July 1, 2024, etc.
Associate Professor, Dr. Phan The Cong, Head of the Faculty of Economics, University of Commerce, expressed his opinion that, in addition to factors causing pressure to increase inflation and cause price fluctuations in Vietnam such as high prices of raw materials and input materials in the world; prices of strategic goods managed by the State (healthcare and education services) may increase after many years of restraint; the impact of salary increases and prices of consumer goods increasing according to seasonal factors; salary reform and increase in regional minimum wages from July 2024... there are also factors that help reduce pressure on price levels such as support for reducing environmental taxes on gasoline and oil; continuing to reduce value added tax in 2024. Therefore, in 2024, inflation may be at 3.5-4%.
The representative of the management agency, the Price Management Department, said that it will continue to promote recent successes. The Ministry of Finance will proactively coordinate with ministries and branches to advise the Prime Minister, Deputy Prime Minister - Head of the Price Management Steering Committee and implement synchronous solutions and measures to proactively respond to challenges in price management according to its authority.
Accordingly, continue to closely monitor the world economic and inflation developments affecting Vietnam to have appropriate response solutions. Closely monitor fluctuations in domestic market prices to advise on appropriate, flexible and timely price management policies and scenarios, especially for essential goods and services that have a great impact on price levels, especially during times of price fluctuations such as holidays and salary policy adjustments./.
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