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Submitted by ctv_en_5 on Sat, 11/07/2009 - 15:42
According to the General Statistics Office (GSO), the consumer price index (CPI) in October increased by 0.37 percent over September.

This is not much of a surprise to economic experts and management agencies because, as a rule, CPI often increases in the remaining months of the year. As many warn that there remains a possible risk of rising inflation by year’s end, effective measures to control the situation need to be put in place.

Regarding the trend of CPI in the next few months, analysts at the GSO say that CPI will continue the increase and is likely to reach an even higher level than October. They have attributed the rise in CPI to fluctuations in the global oil and petrol prices, which may see a slight increase as the world economy recovers further.

Last week, world oil prices experienced a sharp increase, surpassing the US$80 per barrel mark, driving domestic retail oil and petrol prices up. Meanwhile, businesses will boost import their activities to enjoy tax preferences from now till the end of this year. Despite loans being tightened up, it is difficult to reduce the flow of money into the market as the domestic demands for credit in the last two months of this year is predicted to rise further.

Nguyen Tien Thoa, Head of the Price Control Department at the Ministry of Finance says that it is imperative to be cautious about CPI growth in the coming months and a possible risk inflation returning in mid 2010 in case, the delay of looser monetary finance policy in 2009 has a knock-on effect on next year. However, if this year’s monetary policy is well in place, solutions to control monetary finance can be adjusted more flexible and in line with the economic situation both inside and outside of the country. In addition, the delay of next year’s looser monetary finance policy will be dealt with. If scenarios to curb inflation are implemented well by ministries and sectors, the inflation rate will be kept below 10 percent, Thoa notes.

In the face of fluctuations in the CPI, Dr Vu Dinh Anh, Head of the Price and Market Research Institute, proposes that five solutions need to be adopted to keep the CPI stable. Firstly, balancing supply and demand and accelerating the disbursement of funds in line with the stimulus policy when people’s spending increases by the end of the year. Secondly, carrying out economic stimulus programmes with greater efficiency to boost production output and meet the market demands.

Thirdly, keeping the rate of credit growth at less than 30 percent for the whole year, stabilising the exchange rates between the US$ and the VND and basic interest rates in VND to help businesses maintain input costs in line with the 7 percent spending target set by the National Assembly to avoid putting pressure on prices.

Fourthly, stabilising the prices of subsidised products for mountainous areas and essential services such as electricity and transport, post and telecommunications from now until the end of the year to ensure price levels.

Lastly, tightening market control including trade fraud, food hygiene and safety and enforcing the State’s pricing regulations to avoid market fluctuations and keep prices at a reasonable level.

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