|
Prices to cool down in Q4
With the current happenings in the world’s and domestic markets, the consumer price index in the fourth quarter is believed will not increase as much as it normally does in the last months of the year.
Nguyen Dinh Bich, a senior economist at the Trade Research Institute, in an article in Saigon Tiep thi newspaper, wrote that prices will not increase in the time to come.
First of all, the main culprit of the galloping inflation, food and foodstuff prices, will be controlled.
The prices of food and food services, which account for 42.85% of the basket of consumer commodities and services, increased only by 0.99%, 1.56% and 0%, respectively, in the past three months, which was the main reason behind the moderate CPI increase of 0.95% per month.
There is every reason to believe that food prices in the upcoming months will stay stable or even decrease, which would lead to consumer price decreases. Rice output is expected to increase by 2.6mil tonnes this year – a record high for the last two decades. Meanwhile, rice exports are expected to reach 4.5-4.6mil tonnes, the same as the last three years. This means that rice stocks will increase sharply, leading to the high possibility that the rice price will go down together with the rice price in the world.
As Vietnam has been relying on imported materials, material price decreases in the world’s market prove to be good news as they will help domestic prices decrease.
IMF statistics showed that material prices in July increased by 1.62% only, while falling down by 10.69% and 9.92% in August and September, respectively. The downturn of material prices is believed will continue in the last three months of the year.
The world’s economy is expected to continue to be gloomy, which means lower purchasing demand and softer prices, and thus price decreases in the domestic market.
Many of Vietnam’s export markets are struggling with the financial crisis so the demand for imports from the markets will decrease. When export markets are narrowed, pressure on domestic prices will be eased.
It is expected that the last months of 2008 will be less bustling as far as shopping compared to previous years: High inflation this year has forced people to spend a lot of money on basic needs.
Statistics show that total retail turnover in the first nine months of the year increased sharply by 30.1%. However, if excluding price increases, retail turnover increased by 6% only.
It is expected that the GDP growth rate this year will be lower than last year, reflective of a slowdown in the increase of incomes and weakened purchasing power.
A CPI increase of only 1-1.4% in the fourth quarter of the year is highly possible, according to the article.
VNN
|
