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Bumper paddy crop will force inflation rate down: expert
VietNamNet would like to brief an article by Nguyen Dinh Bich, a senior economist, expert at the Trade Research Institute, published in a local newspaper. The expert says that the bumper paddy crop in the north will bring a sigh of relief to the lips of Vietnamese people.
Food now just accounts for 9.86% of the basket of commodities and services that serves the calculation of the consumer price index, and the winter-spring crop output in the north just accounts for 19% of the total rice output of the country. However, the bumper crop in the north is significant enough to change the situation of the fight against inflation.
The main culprit of high inflation
Food always plays a big role in generating high inflation. With the increase of 52.88% in the first five months of the year, an 18-year high, it is clear that food has been making a big contribution to the galloping consumer price increase of 15.96%.
Food price increases have certainly led to foodstuff price escalation. The price of foodstuffs, which account for 25.20% of the basket of commodities and services, galloped by 18.23% in the first five months of the year.
Therefore, keeping a rein on food and foodstuff price increases will help eliminate the biggest factor that causes inflation. And because of this, the good news about the bumper winter-spring crop in the north should relieve Vietnamese people.
Why bumper crop so important?
Because producing rice in the north has always been the ‘hottest front’.
In order to harvest 6.2-6.4mil tonnes of paddy as estimated, northern farmers have had to overcome a lot of difficulties, including the serious drought that occurred at the beginning of the crop, the scorching cold never seen in the last four decades, insects, and the skyrocketing of input material prices.
The north just puts out 19% of the total country’s rice yield, but if crop failure occurs there, the consequences are very serious. A government instruction to stop exporting rice in such a case is also ineffective.
Now, the bumper crop means that Vietnamese people do not have any reason to worry that the rice price will increase any more.
Meanwhile, the sharp increase of summer-autumn rice field space in the south can be considered a guarantee of a year of great success in rice production. Vietnam will have some 1.3mil tonnes of rice even if southern fields have a yield similar to last year.
Moreover, the considerable rice price decreases in the last couple of weeks in the world’s market also mean that prices will not increase any more as there will be no speculation.
All the above factors show that the inflation rate reached its highest peak in May.
VNN
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