Inflation in the world increased sharply in the first 3 months of 2022 due to a strong recovery in demand, supply chain disruptions and the Russia-Ukraine conflict. But in Vietnam, the price level is generally still well controlled.
At the press conference to announce Vietnam’s socio-economic data for the first quarter of the General Statistics Office on March 29, Ms. Nguyen Thu Oanh – Director of the Price Statistics Department – affirmed that there are many reasons for this. . But she believes that inflation pressure in the remaining months of the year is quite large.
In the first quarter, the world economy recovered, the demand for raw materials and materials for production increased while the supply was interrupted, causing commodity prices on the international market to tend to increase sharply.
Inflation pressure in the world
Inflationary pressures are high in many countries, including leading economies such as the US, Japan and European countries. The US consumer price index in February increased by 7.9% year-on-year, the highest since January 1982.
Japan’s consumer price index rose for the sixth consecutive month. Inflation in the UK also hit a 30-year high.
In addition, the conflict between Russia and Ukraine, along with the economic sanctions imposed by the US and the West on Russia – the largest natural gas exporter and the second largest oil exporter in the world – have push up global energy prices.
Russia is also an important exporter of fertilizers and wheat, and shortages of these two commodities raise global food prices and exacerbate inflationary pressures.
According to a report released by the General Statistics Office on March 29, in the country, the economy continued to grow under new normal conditions, the demand for production of goods for consumption and export along with the impact of World commodity prices have pushed up the prices of some goods. But in general, the price level is still basically well controlled.
The consumer price index (CPI) in the first quarter increased by 1.92% over the same period last year, although higher than the increase of 0.29% of the first quarter of 2021 but lower than the increase of the first quarter of the years 2017-2020.
“Vietnam’s inflation is well controlled because the group of goods in the CPI basket varies from country to country. For example, oil and gas – which accounts for a large proportion of the US and European CPI basket – has increased in price. strong because of the need for recovery and the Russia-Ukraine conflict,” explained Ms. Nguyen Thu Oanh.
Why does Vietnam’s inflation not increase sharply?
“Meanwhile, food and food make up a large proportion of Vietnam’s CPI basket. Vietnam’s production and supply of food and food is still abundant, meeting the needs of the people.” she added.
For example, the price of pork decreased by 2.72% from the previous month (making the overall CPI decrease by 0.09 percentage points), of which the urban area decreased by 3.11%; rural areas decreased by 2.45%.
Pork prices fell due to the consumption rule after the Lunar New Year, prices returned to normal when the supply was guaranteed. Output of live pigs for slaughter in the first quarter was estimated at 1,041.6 thousand tons, up 4.3% over the same period last year.
In addition, the price of educational services decreased by 4.24% because a number of provinces and centrally-run cities exempted and reduced tuition fees from the first semester of the school year 2021-2022 due to the impact of the Covid-19 epidemic, reducing CPI to 0 ,23 percentage points.
Housing rents decreased by 15.14% over the same period last year as many households reduced prices to support tenants during the complicated epidemic situation, causing CPI to decrease by 0.07 percentage points.
According to Ms. Oanh, another reason is the Government’s initiative in price management in recent years.
The policy was issued in a timely manner to help stabilize production and business activities of businesses and people, and to reduce significant pressure on the price level, such as reducing value-added tax on some commodity groups. , service from 10% to 8% from 1/2; reduce 50% of the environmental protection tax rate for jet fuel from January 1, 2021 to the end of December 31, 2022; reduce the collection of 37 fees and charges in the first 6 months of 2022.
The management of petrol and oil prices closely followed world price movements, and the supply of gasoline was directed to promptly overcome. The localities have strengthened price management in the area, many businesses actively participate in the price stabilization program.
Inflationary pressure in the coming months
According to the General Statistics Office, up to now, the domestic price level is still basically under control, but the inflation pressure in the remaining months of the year is quite large.
“According to our assessment, inflation pressure in the last months of the year will be very large. CPI in March increased quite high compared to February, contrary to the rule that the month after the Lunar New Year will decrease compared to the month during Tet.” Ms. Oanh said.
The price movement of goods and raw materials in the world is continuing to increase sharply in the context of the complicated war between Russia and Ukraine, causing disruptions to the supply chain, especially the price of petrol, which puts great pressure on costs. production by enterprises and consumption by people.
Along with the impact of growth-promoting support packages, Vietnam’s economy is likely to recover more strongly in the coming quarters, and the increased consumer demand for goods and services will push up commodity prices.
Although it is a country with abundant food and food resources, it will inevitably be affected by world prices when the supply of fertilizer and grain used for animal feed declines sharply.
“Vietnam’s economy has a large openness. In the context of high world goods, the risk of imported inflation is inevitable,” commented Ms. Oanh.
“Petroleum makes up a small proportion of Vietnam’s CPI basket of goods, but at the current rate, the upward momentum will certainly create hidden cost pressure, because it is an input material for most industries. “, she added.
According to her, reaching the inflation target of about 4% of the National Assembly is not an easy challenge.
Therefore, according to the General Statistics Office, the management and administration of prices in the coming time should continue to be done cautiously, proactively and flexibly to ensure control of the growth rate of the consumer price index. average rate in 2022 at about 4% according to the target set by the National Assembly.