Consumers in Hà Nội buy goods at BRGMart. VNA/VNS Photo

Nguyễn Thu Oanh, head of the Price Statistics Department under the General Statistics Office (GSO), speaks to Vietnam News Agency about the upward trend of the Consumer Price Index (CPI) in the final months of 2023.

Could you share some assessments on market developments and factors affecting CPI in the first ten months of this year?

CPI in October increased by 0.08 per cent compared to September. The main reason is that some localities increased tuition fees and domestic rice prices surged following rising export rice prices.

CPI in October witnessed a 3.2 per cent gain compared to December 2022 and 3.59 per cent year-on-year increase.

The ten-month average CPI hiked by 3.2 per cent year on year with core inflation increasing by 4.38 per cent.

The ten-month average air ticket price index increasing by up to 75 per cent over the same period last year affected factors that increased CPI in ten months.

There is an upward trend in the airline costs and passengers' travel needs. During holidays, Lunar New Year and summer vacations, market demand has affected air transport prices as well as train ticket prices (increasing by 30 per cent). Passenger car ticket prices also increased by approximately 8 per cent.

Other reasons also attributed to the CPI increase. The education price index increased by 7 per cent year on year as some localities adjusted tuition up for the 2023-24 school year.

The price indexes of housing, construction materials and food increased by 6.74 and 5.48 per cent respectively over the same period last year.

The State utility group Vietnam Electricity adjusted the average electricity retail price up 3 per cent from May 4.

On the contrary, there were a number of factors that reduced CPI in ten months.

The domestic oil and petrol price index decreased by 13 per cent year on year following global price fluctuations while the domestic gas price index reduced by 8 per cent over the same period last year following the global prices.

How do you evaluate the market price trend in the last months of 2023?

Compared to the same period last year, the CPI in the first months of the year tended to decrease and from July it gradually increased again.

Specifically, January's CPI increased the highest at 4.89 per cent, then gradually decreased. In June CPI was recorded at only 2 per cent, July 2.06 per cent. October’s CPI increased to 3.59 per cent.

The GSO predicts that the CPI will continue to increase gradually in the last months of the year due to a number of main factors that may affect market prices and increasing inflation.

Domestic rice prices are forecast to increase following rising export rice prices thanks to increasing demand in Asian and African markets, especially after Indonesia announced that it would import 1.5 million tonnes of rice for national reserves until the end of 2023.

Meanwhile, Việt Nam and Thailand are the two main rice suppliers of Indonesia.

In addition, a 20 per cent increase in base salary will leave impacts on increasing prices of consumer goods and services.

Global oil and petrol prices are likely to increase again. The International Energy Agency (IEA) forecast that the world will continue to be in short energy supply in 2023 and some countries are making efforts to make compensation for the currently low reserves.

If the global oil and petrol prices increase at the end of this year, it will immediately impact domestic oil and petrol prices and thereby impact CPI.

Prices of food, beverages, and garments often increase at the end of the year due to increased shopping demand, especially during Lunar New Year.

Tourism services will continue to recover, affecting the prices of many other products in restaurants, culture, entertainment.

Could you please share some solutions to stabilise the market price level and control inflation in the last months of the year?

In that context, the GSO has proposed a number of solutions.

The Government, relevant ministries and sectors need to closely monitor global price developments, inflation and timely issue risk warnings on prices and inflation in Việt Nam to take appropriate response measures to ensure supply and stabilise domestic prices.

We need to prepare adequate supplies to promptly meet people's consumption needs, especially food items and essential consumer goods and services. Policies on exemption, reduction, and extension of taxes, fees, charges, and land rent that have been issued need to be implemented effectively.

It is necessary to control the price of input materials and increase the use of domestic raw materials to gradually replace imported sources.

The GSO proposes strengthening inspection and supervision of measures to declare prices, post prices, and publicise price information. Stocking up on goods and hiking prices must be strictly punished.

There is now still room for adjusting service prices managed by the State in the last months of the year, but it is necessary to decide the extent and timing of the adjustment to ensure social stability, minimise negative impacts on the poor, avoid causing cost-push inflation as well as creating expected inflation of the economy.

The Government needs to continue to operate monetary policy proactively, flexibly, cautiously, along with fiscal policy and other macroeconomic policies to control inflation as set targets. — VNS