Vietnam successfully keeps inflation under 5% target

Thứ Năm, 29/12/2016, 09:26

GSO General Director Nguyen Bich Lam said 2016 was a successful year in controlling inflation amidst rebounding prices of some essential goods, as the CPI in December increased by 4.74% from a year earlier, lower than the 5% target set by the National Assembly.

Meanwhile, the average CPI this year climbed only 2.66% from 2015, the General Statistics Office (GSO) revealed on December 28.

Elaborating on factors contributing to CPI growth, Do Thi Ngoc, Deputy Director of the GSO’s Price Statistics Department, said the increases of medical services prices and school fees pushed the December CPI up by 2.7% and 0.58%, respectively, from one year ago.

The region-based minimum wage for business employees was also raised in the beginning of the year, pulling up prices of some services like household appliance and house repair services, electricity and water services, or domestic helper service.

Unfavourable weather conditions such as a severe cold spell across the northern region in February, drought in central and Central Highlands provinces, saltwater intrusion in the Mekong Delta in April and May, floods in central provinces in Q4 also sent vegetable and rice prices up.

Meanwhile, there are factors that helped curb CPI, GSO said, noting that food and catering services which hold the biggest proportion among the CPI basket of 11 main goods categories only augmented 2.36% this year compared to 2015.

Prices of essential goods in the global markets remained stable, some even dropped sharply in Q1 and Q3 such as fuels and steel, dragging the import and export price indexes in 2016 down 5.35% and 1.83% from last year. Meanwhile, the production price index dropped 0.49%.

The transport category also saw its prices decline 7.31% from 2015, partly attributable to a year-on-year decrease of 15.95% in average petrol prices in 2016.

The core inflation, which excludes grain food, fresh food, energy and State-controlled medical and educational services, in December rose 0.11% from the previous month and 1.87% from December 2015. Meanwhile, the core inflation of 2016 rose 1.83% from last year, according to GSO.

Vietnam aims for an average CPI growth of 4% in 2017.

GSO General Director Nguyen Bich Lam said to that end, the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Planning and Investment and the State Bank of Vietnam should work closely in assessing the price situation and making plans on price management, interest rate and exchange rate adjustment.

The GSO suggested the Ministry of Health and the Ministry of Education and Training to coordinate with relevant agencies to adjust medical and educational services prices in a way that can minimise impacts on CPI. The central bank also needs to keep interest rates and exchange rates stable, in order to ensure the core inflation at about 2%.

VNA