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Government set to curb inflation
The Government would implement measures to curb inflation while ensuring economic growth, said Finance Minister Vu Van Ninh.
The minister was responding to concerns that inflation for all of 2010 might surpass the National Assembly's limit of 7 per cent.
Viet Nam's consumer price index (CPI) rose 0.75 per cent in March over the previous month and 9.46 per cent over the same period last year, reported the General Statistics Office (GSO).
First quarter CPI rose an unexpected 4.12 per cent.
The minister said Government measures would include consistent market pricing policies to avoid irrational pricing and curb inflation while ensuring economic growth.
The minister told a Vietnam News Agency reporter that the Government would continue to effectively control goods and services while encouraging price competition.
The GSO reported that 10 out of 11 commodity groups recorded increases of between 0.15 per cent and 1.38 per cent, but post and telecom services prices continued to drop, by 0.2 per cent, as a result of promotions and discounts.
Housing and construction materials saw the sharpest increase this month, soaring by 1.38 per cent, followed by food and restaurant services, rising by 1.03 per cent, transportation services, up by 0.92 per cent, entertainment and tourist and cultural services with a 0.5-per-cent rise. Garment and footwear saw the lowest increase with 0.15 per cent.
According to Nguyen Duc Thang, Deputy Director of the GSO's Trade and Pricing Department, the sharp increase in CPI during March is attributed to the rise in the price of essential items, including electricity, coal, petrol and steel.
"These are important inputs for many industries," said Thang.
In addition, traditional price increases during the Lunar New Year were not followed by the usual fall in prices after the end of the holiday period.
Rising petrol prices had an impact on transportation and freight charges, which saw an increase of 0.92 per cent, the highest increase during the last five years.
Construction steel prices have gone up to between VND12 million (US$631) and VND12.8 million ($673) a tonne, about VND600,000 ($31.5) higher than three months ago, due to price rises in March for many production inputs including electricity, fuel and coal.
The recent adjustment in the exchange rate for the US dollar and Vietnamese dong by the State Bank of Viet Nam has also made the inputs for many domestic producers more expensive, with producers now relying more on imported raw materials.
Economists says that when the country has fully integrated into the world economy, prices of many essential goods will gradually conform to the market economy.
In March, gold prices and the US dollar soared over the previous month, rising by 1.21 per cent and 1.28 per cent, respectively. Domestic gold prices remained high against last March with an increase of 36.86 per cent due to the impact from the global gold price rises.
Pricing policies
Fiscal policy would be managed in a flexible and careful manner to ensure liquidity in the economy. Payment methods and outstanding credit loans would be put under close control, said Ninh.
"The ministry has asked the Government to require economic groups and State corporations to conduct price stabilisation measures to ensure demand for production and consumption while curbing inflation and ensuring social welfare," he said.
Regarding the continuous increase in petrol prices, Ninh said the ministry had guided petrol trading companies in widening the intervals between price increases.
"To stabilise the market, the ministry will also work with relevant ministries and agencies to ease difficulties for businesses, to improve the business climate and review irrational expenses with a view to saving costs for businesses," said Ninh.
"Businesses are also required to make efforts to renew their technology and more efficiently use energy, in a bid to offer more competitive prices to consumers.
"Electricity and coal prices should be stabilised by the end of this year as required by the Government ."
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