HCMC – The recent power price hike of 5% places more burden on producers, but it is forecast that there would be no strong goods price increases given the poor purchasing power at present.
Goods prices to barely inch up despite power price hike
By Minh Tam - The Saigon Times Daily
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| A consumer eyes jam containers at a supermarket. Prices will hardly increase despite increased input costs - Photo: Minh Tam |
HCMC – The recent power price hike of 5% places more burden on producers, but it is forecast that there would be no strong goods price increases given the poor purchasing power at present.
Pham Thanh Nhan, deputy general director of Saigon Co.op, said purchasing power at the Co.opMart system inched up unnoticeably in late June against late May. He said consumers have yet to loosen their purse strings and mainly spend on essential items and those with discount prices.
Higher power prices will certainly leave a great impact on production and business activities, Nhan said. Still, given the current weak buying energy, producers will not dare to raise prices, but they will continue to withstand the input cost pressure.
“I personally think that there would be no price spikes like what happened in the previous power price increases. Price hikes, if any, would only occur at big firms with exclusive products,” Nhan predicted.
Trinh Chi Cuong, general director of Dai Dong Tien Company, told the Daily that power accounted for 10-15% of the company’s total production costs. However, he stated his company decided to shoulder the cost burden to maintain prices.
Instead, the firm will tighten its operation to control costs, review the list of products and eliminate the unprofitable ones, and improve product quality to enhance competitiveness.
Similarly, Nguyen Tri Kien, director of Minh Tien Bag Manufacturing Company, said his company would offer promotions to boost consumption rather than raising prices.
“Businesses are mired in difficulties, so every little change can further exhaust them. But in the current context, enterprises must save themselves and shoulder everything on their own,” said Kien.
According to business representatives, so far there has been no sign that purchasing power will pick up in the coming time. Therefore, enterprises expected the Government to have stable and consistent macro policies so that they can have confidence in production and investment.
Furthermore, there must be measures to stimulate consumption and solve the outlet problem of producers. “Businesses are used to enduring now. Who can survive has survived. Who cannot has died. The important thing is to revive the entire economy,” said Cuong.