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Government to strengthen control of prices: MOF
Minister of Finance Vu Van Ninh on October 27 talked to the press about the sharp fall of the consumer price index (CPI) in October and its origins.
Ninh said:
The government is still discussing the CPI decrease before issuing concrete instructions. In principle, overly high inflation or deflation is not good for the national economy. The CPI increases or decreases reflect many things about the national economy, including supply and demand and production and business.
What is the reason behind the CPI decrease?
The government’s measures on curbing inflation have shown effects. Besides, the problems of the world’s financial market have had bad impacts on global production, leading to stagnation in production and business.
The trend has been influencing many countries, while leading to the price fluctuations. The crude oil price is an example. The price has never before dropped so dramatically as in the last few days. The price falls can be seen as signs of production stagnation.
The world’s oil price has decreased dramatically, while the domestic prices of essential goods and services have just decreased slightly. Will the government intervene to force prices down?
The prices of many commodities have decreased. However, some groups of producers still want to maintain their profit margins and they have not slashed prices. Other producers purchased materials before at high prices, so they cannot reduce sale prices of finished products immediately. Therefore, the price decreases will be at moderate levels.
The government has asked relevant ministries to check the prices of commodities and services. For example, it has asked local authorities to strengthen control of transport fares as transport firms have not cut fees even though petrol prices have decreased.
Will the government slash import taxes to put pressure on local producers to force them to slash prices?
Tax is just a tool to regulate the market. We should not raise taxes simply because people complain they are too low, and should not lower taxes simply because people think they are too high. Taxation should be considered thoroughly based on local supply and demand, and local production.
Different groups always want different tax schemes. The job of policy markers is to set the most suitable policies, while it is impossible to satisfy the demands of all people.
VNN
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