The year 2021 is the first year to implement the 10-year socio-economic development strategy in the 2021-2030 period and the 5-year socio-economic development plan in the 2021-2025 period, according to the Party's and National Assembly's resolutions.

Closely monitoring changes in supply and demand, using flexible monetary and fiscal
leverage to control inflation from the beginning of 2021. Photo: H. Anh

It is especially important to create momentum for a new phase in economic development. With the fact that we have controlled inflation in a volatile year, from the beginning of 2021, the inflation control has been drastically directed by the Government.

Closely monitoring changes in supply and demand

The Resolution of the National Assembly on the Socio-Economic Development Plan for 2021 has set an average CPI growth rate of about 4%.

Many people believe that, with the current context, the ability to control inflation below 4% as set by the National Assembly is entirely possible. However, it should not be subjective with the control of commodity prices as well as the administration of monetary and fiscal policies.

In particular, January and February are Tet, so the demand for consumer goods and food for Tet activities increases, accordingly, commodity prices may fluctuate. Adequate supply is not guaranteed. This will affect the CPI.

In order to contribute to controlling inflation from January, in Directive 06 / CT-BTC, the Minister of Finance requested the Price Management Department to assume the prime responsibility and coordinate with the relevant units of the Ministry of Finance to capture information, closely monitor changes in supply and demand, the market and prices; especially for some essential goods.

At the same time, in order to have appropriate solutions to stabilize the market during the time when consumer demand increases; promptly advise the Ministry of Finance on appropriate price management measures in order to stabilize the market price and control inflation. Strengthen inspection of compliance with regulations of law on price management.

The Ministry of Industry and Trade also issued a directive on the implementation of measures to ensure supply-demand balance and market stabilization at the end of 2020 and the Lunar New Year 2021, at the same time serving as a premise for the implementation of economic goals in 2021 of the Government.

The Ministry of Industry and Trade requests the Departments of Industry and Trade of centrally-affiliated cities and provinces, its units, groups, corporations, companies and industry associations to soon have plans for production and business; plans to deal with abnormal market fluctuations.

Production units such as Vietnam Oil and Gas Group, Hanoi Beer Alcohol - Beverage Joint Stock Corporation, Saigon Beer - Alcohol - Beverage Corporation, Vietnam Tobacco Corporation, Vietnam National Textile and Garment Group, Vietnam Electricity and Vietnam National Petroleum Group, along with units with commercial activities such as Saigon Trade Corporation, Ha Trade Corporation Internal and Ho Chi Minh City Union of Trade Cooperatives are required to produce and reserve to meet the needs of essential goods to serve the consumption needs of people, especially during the Lunar New Year.

Good control from the beginning of the year

According to expert Vu Vinh Phu, in the first quarter of 2021, the prices will be relatively stable. Except for the price of pork, which is still anchored at a high level, the rest are guaranteed to provide enough for the shoppers who do not need to worry about price increases.

“In 2021, inflation will fluctuate in the range of less than 4% with the condition that macroeconomic balances are stable, monetary policy and fiscal policy are used and managed properly and flexibly. Along with that, it is necessary to ensure enough strategic commodities such as petroleum, electricity, clean water, coal and organize goods circulation, actively reserve essential goods for a long time to ensure enough goods before the fluctuations," this expert said.

For example, Vietnam has produced 70% of the domestic petroleum demand, so it is necessary to have a good plan to store this commodity and gradually limit imports. However, expert Vu Vinh Phu said that despite many favorable factors, inflation control must be implemented well at the beginning of the year, not subjective to economic and price fluctuations during 2021.

Regarding monetary policy, on January 27, presented at the XIII National Party Congress, in eight groups of solutions to effectively implement monetary policy management solutions and operations. In the banking year 2021 as well as the 2021-2025 period, the first solution mentioned by the Governor of the State Bank Nguyen Thi Hong is to continue the target of controlling inflation, maintaining macroeconomic stability; improving the quality of input for policy making (improving the quality of statistics, analysis, forecasting), proactively, prudently and flexibly operating monetary policy solutions and tools, closely coordinating with other macroeconomic policies, especially the fiscal policy to respond flexibly and increase the resilience of the economy to changes in the world economy and currency.