Prices tipped to keep rising

Consumers shop for food in Ha Noi. Prices of essential goods and services are expected to continue increasing. — VNA/VNS Photo Huy Hung

HA NOI (VNS)— Prices of essential goods and services were expected to continue increasing till the end of the year and beyond due to an increase in demand, said the Ministry of Finance.

This included prices of rice and fresh food which would be in high demand through the February 14 Lunar New Year celebrations and holidays.

However, the price of sugar would continue its downward trend because of over-supply and competition from low-priced illegal imports, the ministry said.

And the prices of building materials, including steel and cement, would remain stable for the rest of the year. Vu Vinh Phu, chairman of the Ha Noi Super-market Association, said most supermarkets in Ha Noi had faced a 5-10 per cent increase in wholesale prices of goods – mainly apparel, plastics, chemicals and cosmetics.

But supermarkets had postponed increasing retail prices because of the reduction in customers' purchasing power. The supermarkets would need to work out a schedule to increase retail prices in the future in conjunction with promotion programmes to increase consumption, Phu said.

Economist Pham Chi Lan said inflation was expected to reach 7-8 per cent for the year but the inventory index was still high at 21 per cent for the first eight months.

She said index had dropped from a peak of 35 per cent early this year because some large enterprises had stopped producing.

She said stability in the macro-economy and controlling inflation were important targets this year but the Government still needed to grow the economy.

To help enterprise sales, the Government should increase credit availability and reduce interest rates on borrowing by enterprises so they could reduce prices, Lan said.

The Government should also increase consumer incomes and thus their purchasing power, she said. — VNS