Inflation stable, State-managed prices can be adjusted

As inflation is reported to be under control, there is room to adjust prices of State–managed goods and services in the remaining months of this year.

Deputy Prime Minister Le Minh Khai at a recent meeting said that the pressure on price management was easing, adding that if conditions allowed, prices of several goods and services under the State management could be adjusted following the roadmap at the appropriate points of time.

Adjusting prices this year would also help reduce the pressure on inflation in the coming years.

The Price Management Department reported that the supply of essential goods was guaranteed from the beginning of this year with stable prices which moved in line with proposed scenarios.

The consumer price index (CPI) of Vietnam was forecast to expand at around 3.2 to 3.75 per cent this year. The Ministry of Finance predicted CPI at 3.2 to 3.7 per cent, and the State Bank of Vietnam at 3.7 per cent (plus or minus 0.5 per cent).

Official statistics showed that from January to July, the CPI rose 3.12 per cent over the same period last year, and core inflation by 4.65 per cent.

CPI is on a downward trend, from 4.89 per cent in January to 2 per cent in June and 2.06 per cent in July.

According to the Ministry of Finance, there was room for an increase by 1.61 per cent each month to the end of this year to achieve the target of controlling inflation below 4.5 per cent this year.

As inflation was under control easing the pressure on price management, Khai said that when conditions allowed, prices of several goods and services under the State management could be adjusted following the roadmap at the appropriate points of time to ensure inflation target and ease the pressure in following years.

The fact was that the roadmap of adjusting prices of some State-managed goods and services was delayed for many years.

For example, electricity prices had been maintained unchanged at VND 1,864.44 per kWh for more than 3 years before a recent increase of 3 per cent on May 4. Recently, Vietnam Electricity (EVN) proposed electricity prices to continue to be increased to make up for the loss incurred from rising production costs.

The Ministry of Finance said that it would closely work with the Ministry of Industry and Trade to manage electricity prices to ensure harmonisation of benefits between consumers, the Government and electricity providers.

Khai asked EVN to update production costs with transparency for appropriate adjustments of electricity prices.

For oil and petrol, Khai urged efforts to ensure adequate supply for the domestic market and prevent disruption in supply.

Regarding the price bracket for domestic air passenger transportation services, the Ministry of Transport was also conducting reviews and evaluations for adjustments in the ceiling levels with the maximum increase of 6.67 per cent depending on the transport distance. The Ministry of Transport said that prices of factors which forms the prices of domestic air passenger transportation services increased significantly, including fuel, wages and exchange rates.

Regarding school fees, Deputy Prime Minister at a meeting in July asked the Ministry of Education and Training not to increase school fees for 2023-24 school year, part of the effort to stabilise macro economy and social security and control inflation.

However, Deputy Minister of Education and Training Hoang Minh Son said that fees kept unchanged this year would be a big challenge to schools, especially universities, where school fees, accounting for 50-90 per cent of revenue, had not been adjusted for three years.

Khai asked the Ministry of Education and Training to study carefully to raise an appropriate roadmap for adjusting school fees.

The Ministry of Finance said that ministries should consider adjusting prices of goods and services provided by State-owned businesses at appropriate points of time and avoid some increases at the same time.

In addition, a close watch must be placed on price fluctuations and inflation developments in the global markets to raise measures to prevent negative impacts.

Source: VNS