The prices of multiple products and services are forecast to rise this year, putting pressure on inflation.

Shoppers inspect pork products at a local supermarket. Comprehensive
solutions are needed to keep inflation below 4% this year - PHOTO: VNA

Therefore, experts told a seminar on January 3 that it is necessary to work out comprehensive solutions to curb inflation at below 4% this year.

At the seminar on the domestic market and prices in 2019 and forecasts for 2020, held in Hanoi by the Institute of Economics and Finance’s Academy of Finance and the Ministry of Finance's Department of Price Management, experts questioned the likelihood of achieving the target.

Nguyen Duc Do, deputy director of the Institute of Economics and Finance, was cited by Vietnamplus news site as saying that the country’s inflation target would be hard to achieve as pork prices have surged since the last quarter of last year.

In the worst-case scenario, if African swine fever is not curtailed by the first half of this year and inflation starts to decline by mid-year, it will be difficult to keep inflation below 4%.

In addition, Vietnam has set an ambitious gross domestic product growth target in 2020, at 6.8%, while its growth model still depends on input factors, such as capital, which puts pressure on inflation.

However, if the exchange rate is kept stable using the high foreign currency reserves and the State Bank of Vietnam still pursues a cautious policy approach, the country’s consumer price index (CPI) may rise by 3.5% this year.

A representative of the Department of Price Management, under the Ministry of Finance, said that pork prices are forecast to continue rising in the first months of this year. The prices of healthcare and education services as well as land may also increase.

Therefore, the prices of goods should be managed in a cautious and flexible manner to help obtain the inflation target.

The Ministry of Finance suggested not adjusting public services fees in the first quarter of the year and tightening control over the prices of goods before, during and after the Tet holiday, especially for pork and entertainment and catering services.

Ministries, agencies and localities must keep a close watch on the market to work out solutions to stabilize the prices of essential products and ensure an adequate supply of goods to prevent potential price hikes.

Le Quoc Phuong, former deputy director of the Industry and Trade Information Center of the Ministry of Industry and Trade, also proposed the Government continue adopting policies to control inflation and ensure the adequate supply of goods.

In the long term, solutions are needed to curtail gossip that raises consumer concern and encourages market volatility. Economic growth based on input factors, such as capital, manpower and natural resources, must move to a growth model based on innovation and advanced technology.

According to a report by the Institute of Economics and Finance delivered at the seminar, Vietnam's CPI last year picked up by 2.79% over 2018, well below the ceiling approved by the National Assembly. The rate was the lowest in three years.

Nguyen Ba Minh, director of the Institute of Economics and Finance, attributed the CPI rise to the electricity price hike in March last year and the higher hospital services prices, sending the CPI up by 0.18%.

In addition, the prices of food posted an increase of 5.08%; beverages and tobacco, 1.79%; and public transport services, 3.02%.

Phuong from the Industry and Trade Information Center said the targeted inflation of below 4% was a result of the Government’s efforts to stabilize the economy, ensure an adequate goods supply, adopt effective control over credit and hold higher foreign currency reserves.

However, the December 2019 CPI rose 5.23% against the same month in 2018, the highest since 2014.