Although there are unpredictable developments that may affect inflation control, these are all factors in the operating scenario of the Government as well as the Price Management Steering Committee. The average inflation rate in 2021 is likely to be controlled at less than 4%.

The average CPI control for 2021 will still be about 4%. Photo: Thu Hien

Abundant supply

Facing the risk of a strong outbreak of the Covid-19 pandemic, there are many concerns that the possibility of high inflation will be unavoidable. According to estimates from the Ministry of Finance, if the CPI in the remaining months is assumed to increase at the same rate, there is room to increase by 0.66% for each month to ensure the control target is below 4%. Controlling the average consumer price index (CPI) for the whole year of 2021 at about 4% is still within the control of the Government if there are no too sudden factors.

The fact shows there are still potential risks to inflation control coming from the world situation such as the price of fuel, steel billets, and steel in the world may increase suddenly, affecting domestic prices increase accordingly and trade tensions in countries, especially the US-China and geopolitical tensions in many territories. There are some factors that put pressure on the price level in the country such as the demand for shopping increases according to the rules at the beginning of the year to prepare for the Lunar New Year, causing the price level in January and February to be high; domestic rice prices increase; prices of petroleum products, LPG increased. Some commodities have increased prices due to input materials as well as rising demand such as animal feed, construction materials (especially steel prices). In the coming time, some commodities may continuously increase along with world prices such as fuel prices, petroleum, steel; animal feed; domestic rice prices are likely to increase slightly.

According to the Ministry of Finance, the price increases of some essential goods and inflation in many nations in the world in 2021 have been forecasted by the Ministry of Finance and other ministries and sectors in the price management and report to the PM from the end of 2020. This is great pressure on the domestic price level but it is also a factor that has been calculated in price management scenarios, so there are solutions to proactively manage domestic prices to control inflation for the whole year 2021 at an average level of less than 4%.

The Ministry of Finance also said there are many factors that reduce pressure on the price level, such as airfares, train fares, package travel services decreased due to the Covid-19 pandemic; postal service prices do not increase or decrease slightly; prices of some food items. It is expected that in the future, the price level may stabilise or decrease slightly due to abundant domestic supply.

Enhanced price checks

According to Nguyen Anh Tuan, Director of the Price Management Department, Ministry of Finance, the assessment and forecast of trends of important and essential commodities is the focus of price management and administration in 2021, combined with the assessment of core inflation of the State Bank. To control inflation in accordance with the objectives set by the National Assembly and the Government, the Ministry of Finance has worked with ministries and branches to report to the Prime Minister price level movements in the first months of the year and propose solutions to solve the problem of price regulation for the remaining months. In which, the management and control of prices and inflation in 2021 will continue to be cautious, flexible and proactive. The Ministry of Finance will also focus on supporting the implementation of the Government's dual goals while stabilising the price level to remove difficulties for production, business and people's lives, while supporting the promotion of economic growth.

Recently, following the direction of Deputy Prime Minister Le Minh Khai in Official Letter No. 3025/VPCP-KTTH, the Ministry of Finance issued Official Letter No. 4896/BTC-QLG asking the People's Committees of provinces and cities under the Central Government to continue to strengthen the management, administration and stabilise market prices in the area to support the implementation of the Government's dual goals while keeping the price stable level to remove difficulties for production, business and people's lives, supporting economic growth and avoiding abnormal price fluctuations affecting socio-economic life

Localities need to closely monitor market price movements in their localities in order to promptly take measures to stabilise prices in accordance with law, especially for essential consumer goods and services for people, essential goods that are inputs for production in the area like medical supplies for epidemic prevention, agricultural products in areas affected by the Covid-19 pandemic.

Strengthen the management of price declaration and price listing, especially for medical supplies for epidemic prevention and control, essential goods in the area. Specialised and thematic inspection of prices, price supervision market and strictly handle cases of violations of the law on prices.