Caution with CPI growth

                    Caution with CPI growth Cautious measures are needed to curb CPI growth

The price consumer index (CPI) gained 0.1 percent in August compared with July. In the first eight months, the index rose 2.58 percent compared with December 2015 and 1.91 percent compared with the same period last year, but lower than the target of the National Assembly. The figure was released at the August regular meeting of the Domestic Market Management Team under the Ministry of Industry and Trade.

Do Thi Ngoc, Deputy Director of the Price Statistics Department of the General Statistics Office of Vietnam, said medicines and medical services (up 33.14 percent) contributed the most to CPI growth in the first eight months. Main reasons for the lower increase of CPI compared with the same periods of previous years include the decrease in prices of foods, steel and gas.

Apart from objective reasons, flexible pricing policies also contributed to CPI control. Nguyen Anh Tuan, Director of the Agency for Price Management under the Ministry of Finance, said medical and education service costs had the strongest impact on CPI growth in the early months of this year. Therefore, the Ministry of Finance applied flexible policies to manage prices of these services in August.

“In early August, the Ministry of Finance sent three official letters to the Ministry of Health requesting them to carefully consider adjustments to medical service costs. After seeing positive market signals, including decreases in prices of many kinds of goods, the Ministry of Finance sent an official letter to the government on August 12 requesting that medical service costs should be adjusted immediately. These efforts helped us to avoid a shocking CPI growth rate in August despite a 6.18 percent increase in the CPI of medical services. Education service costs did not strongly affect CPI in August, either,” said Nguyen Anh Tuan.

Caution needed towards year end

The Domestic Market Management Team predicted that education service costs would have the strongest impact on CPI growth in September due to increases in school fees. According to Do Thi Ngoc, however, school fee rises would contribute just 0.6 percent to CPI growth in September.

Although the CPI is predicted not to grow strongly in September, Vo Van Quyen, Director of the Domestic Market Department and Deputy Head of the Domestic Market Management Team, said petroleum prices often grow in September and directly affect the CPI towards the year’s end. Therefore, it is necessary to keep closer watch on market changes and take cautious measures to curb CPI growth.

Phuong Lan / ven.vn