Curbing inflation in the face of rising CPI

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VOV News English - 41 month(s) ago 11 readings

Curbing inflation in the face of rising CPI

(VOV) - Vietnam needs to ensure the supply-demand balance to curb inflation, say economists.

The Consumer Price Index (CPI) in the first seven months of 2011 kept growing abnormally, with a sharp increase in April.

Then, after two months, it bounced back to 1.17 percent in July after two months slowing down and this is attributed to the price hikes of food and foodstuff.

According to economists, there are many reasons for the increasing prices of food, foodstuff, as goods, including short supplies on account of epidemics, bad weather, speculative activity and price manipulation.

In addition, there are unreasonable fees paid for goods passing through the hands of middlemen, says Vu Vinh Phu, chairman of the Hanoi Supermarket Association.

He notes that the price of sugar delivered from factories is VND17,000 per kilo in factories but it is VND26,000 in the retail market.

It is high time to stop the monopoly over the sales of goods, especially essentials, he says.

He predicts that the CPI will slow down in August.

However, other economists say, synchronous measures should be put in place to keep the rate of inflation in 2011 at 17 percent because it has already risen over 14 percent in the first seven months.

They also propose expanding production to ensure the supply of goods, especially food and foodstuff and tightening the management of food exports and market prices.

Vu Dinh Anh, Director of the Market and Price Research Institute under the Ministry of Finance, says managing market prices is part of efforts to curb inflation but it is still based on administrative measures.

According to the Department of Price Management under the Ministry of Finance, it is necessary to take effective measures to stabilize prices and prevent speculation and smuggling.

Vietnam should focus on managing the prices of electricity, petrol, and coal in line with market-driven mechanism, it says.

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