HA NOI — Ministries and sectors need to draft measures to reach the target of single-digit inflation in 2012, says Deputy Minister of Industry and Trade Ho Thi Kim Thoa.
|A customer shops at Co.op Mart Cu Chi in HCM City. Viet Nam's high inflation is being blamed on a poorly performing domestic economy.—VNA/VNS Thanh Vu
Thoa told the year-end meeting of the domestic market watch team here last week that industries and sectors this year should operate at full capacity to meet domestic demand for essential goods and improve distribution networks, with close co-operation on determining supply and demand for goods and reasonable changes in price.
It was imperative to ensure sufficient supplies of essential products and avoid price fevers, Thoa said. The Ministry of Industry and Trade would ensure sufficient supplies of electricity for production of essential goods, she added.
The Government also needed to devise further policies to support development of the domestic market, especially trade promotion programmes, she said. The ministry would continue to encourage export, limit the trade deficit and promote production of domestic goods.
Thoa urged the State Bank of Viet Nam to stabilise foreign exchange rates and ensure foreign currency supplies for enterprises importing materials and equipment for domestic production, such as fuel, fertiliser, pig iron and pharmaceuticals.
According to the domestic market watch team, inflation spiked nationwide in the first seven months of last year due to soaring prices of rice and other food staples, as well as inflationary pressures worldwide.
Nguyen Tien Thoa, head of the Ministry of Finance's Price Management Department, said Viet Nam's high inflation was also due to the low competitive capacity of the domestic economy, including low-quality growth, an ineffective investment structure and loose credit policies in previous years that caused economic growth to overheat.
Inflation rose at a rate of 18.58 per cent in 2011, the General Statistics Office (GSO) reported last month. However, inflation began to slow in August due to such measures as tighter credit policies and State budget cuts.
Inflation fell from a one-month rate of 0.93 per cent in August, to 0.82 per cent in September, 0.36 per cent in October, 0.39 per cent in November and 0.52 per cent in December. All of these figures were well below the rates during the first seven months of the year, which ranged between 1.09 per cent and 3.32 per cent per month, the GSO said.
For this year, the Government has targeted inflation below 10 per cent, a growth rate of 6-6.5 per cent, and a 13-per-cent increase in export turnover. — VNS