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MoF: Inflation to remain below 4% in three scenarios

Released at: 18:20, 03/01/2018

MoF: Inflation to remain below 4% in three scenarios

Illustrative image from nghiencuuquocte.org

Ministry's three scenarios all see inflation within NA target of 4%.

by Quang Huy

The Ministry of Finance (MoF) has outlined three scenarios for inflation in 2018, with the consumer price index (CPI) in all staying below 4 per cent; the target set by the National Assembly (NA).

In the first scenario, food prices are expected to remain relatively stable and only rise slightly during holidays. Hikes in healthcare costs in the first quarter are projected to increase the CPI by 0.17 per cent, while wage increases and higher power costs will drive it up by 0.14 per cent and 0.1 per cent, respectively.

A 5 per cent increase each in petrol and gas prices would lift the CPI by 0.28 per cent and 0.06 per cent, respectively. After factoring in these price rises, the CPI in 2018 would rise 3 per cent.

The second scenario, similar to the first with the exception of pork prices rising 7 per cent by the end of the year and petrol and gas prices rising 10 per cent, puts the CPI at 3.4 per cent.

The CPI would be 3.9 per cent in the third scenario, assuming a 15 per cent rise in pork prices and 15 per cent hikes in petrol and gas prices, with other price increases the same as in the first scenario.

According to the General Statistics Office (GSO), the CPI was estimated at 3.53 per cent in 2017, reaching the target of keeping it under 4 per cent for the year.

Since the beginning of last year, 45 cities and provinces nationwide have increased medical check-up and hospital fees for people without health insurance, which made the December CPI increase 1.35 per cent against December 2016.

Higher tuition fees, higher minimum monthly salaries, and many provinces being affected by natural disasters and unfavorable weather also led to a higher CPI in 2017, the GSO said.

However, the pace of the CPI increase in 2017 was contained by certain factors, including lower prices for foodstuffs, mainly meat, the implementation of market stabilization programs in some localities, and the central bank’s adoption of monetary policies to sustain macroeconomic stability and control inflation. Vietnam’s core inflation rate stood at 1.41 per cent in 2017.

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