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Inflation takes a break as prices decline
HCM City residents have been happy to hear that the prices of several goods are on the decline.
Huynh Tien Dung, director of Minh Cat, a city-based rice distributor, said despite an increase of VND300,000 (US$18.2) per tonne in transport costs, rice is VND1,000 lower than a month ago.
LPG prices are VND6,000 to 12,000 lower per 12kg cylinder after imported gas fell by $50 per tonne to $975 in the world market.
Construction material shops on Phan Dang Luu Street in Binh Thanh District are selling Kyoel and Pomina steel at VND20,000 per kilogram, VND1,000 lower than two weeks ago. Nguyen Ngoc Anh, general director of SMC Trading Corp, said steel prices fell due to a decrease in the prices of steel imported from China and declining demand here.
Ha Tien Cement is selling at VND70,000 per 50kg bag, VND1,000 lower than last week, Tran Hoang Tuan, director of the cement distributor Tan Xuan Anh, said.
"Cement prices have dropped since supply has risen and demand fallen in the rainy season," he said.
Employment down
Though the central bank’s tight money policy appears to have brought down inflation, there are concerns that measures taken to curb inflation may result in unemployment.
In the past few months a number of small-and medium-sized enterprises (SMEs) have announced plans to lay off staff.
FPT Telecom Corp will cut 10 per cent of its staff, or around 1,000 employees.
Dong Nai food processing company Donafoods has unveiled plans to import new equipment, each of which can replace 150 workers, to lay off some 2,000 workers this year.
Cao Sy Kiem, chairman of the Viet Nam Small and Medium Enterprise Association, said unemployment would be on the rise as enterprises, especially private ones, face difficulties caused by tight banks loans and other factors.
The head of the National Statistics Bureau’s Labour and Population Department, Dong Van Huong, said many other SMEs plan to lay off employees.
Unemployment funds are not available in many Asian countries including Viet Nam, Huong said, and people who lose their jobs have to find other jobs as soon as possible.
Besides, he said if a country’s GDP growth rate drops by 2 per cent, the country’s unemployment rate would increase by 1 per cent.
Thus, if Viet Nam’s growth rate falls below the 8.5 to 9 per cent target originally approved by the National Assembly for this year, an increase in unemployment is inevitable.
The unemployment rate steadily dropped in the past decade, from 6.42 per cent in 2000 to an estimated 4.64 per cent last year.
VNS
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