|
The pressure on inflation may be harder in Q4: Economist
Consumer price index (CPI) increases in Hanoi and HCM City in September are both higher than in previous months, which has raised concerns that inflation for the whole country in September and during the last few months of the year will also be very high.
Vu Dinh Anh, Deputy Head of the Price and Market Research Institute, an arm of the Ministry of Finance, talked with Thoi bao Kinh te Saigon about the factors that may affect inflation in Vietnam during the last few months of the year.
Thoi bao Kinh te Saigon: A lot of people have forecast that the CPI increase for the whole country in September will be approximately one percent after the two big cities Hanoi and HCM City reported high CPI increases. What do you think?
Vu Dinh Anh: I still do not have figures about CPI for the whole country in September. In previous years, CPI increases for the whole country were always between the CPI increases of Hanoi and HCM City. However, this year, I observed that the CPI for the two big cities in the last months did not govern CPI for the whole country, maybe because of the calculation methods used by the General Statistics Office.
The CPI in September increased more sharply than the previous two months because the price of food increased during the month. In September, the price for some products in the education sector increased, but the price increases only occurred for certain goods and will not be seen again in September.
I personally forecast that the CPI increase in September for the whole country will only be 0.5 percent.
Thoi bao Kinh te Saigon: So do you mean that there is no need to worry about high inflation this year?
Vu Dinh Anh: We cannot say so at the moment, because there are many factors that may affect inflation in the upcoming months. The fourth quarter will be the time when we can see the biggest impacts from applied policies, especially fiscal and monetary policies.
Since September, the prices of many goods have stayed firmly high. The gold price in the world market has climbed to new record highs, which, in theory, is a sign of global inflation.
Recently, the prices for some products such as rice and coffee have increased, which has affected domestic inflation. Steelmakers, for example, had to raise sales prices earlier than expected.
I am sure that from now to the end of the year, the demand for imports will increase, both imports for local consumption and for investment. Commercial banks have raised dollar prices, while dollar interest rates have also increased sharply, which means an increasing demand for dollars, thus putting more pressure on inflation.
In principle, the budget spending policy and monetary policy will have influences on inflation. Budget spending always increases at the end of the year. Regarding monetary policy, the credit growth rate in August was three percent, and the credit growth rate for the whole year of 2010 will exceed 25 percent.
I have to remind you that 25 percent in credit growth rate is the ceiling growth rate set for 2010. To date, the credit growth rate has been a little over 16 percent, with which the economic growth rate has nearly reached 6.5 percent already. Therefore, I don’t think that we need to hurry to push up credit growth, because an increase in the high credit growth rate will lead to high inflation.
Thoi bao Kinh te Saigon: How high will the inflation rate in 2010 be?
Vu Dinh Anh: It is difficult to forecast the inflation rate for the whole year, because Vietnam’s inflation depends on world prices, but it is still unclear what the price tendencies in the world market are. If the world’s economy recovers, prices will increase, but if the world economy falls into a double dip recession as some people worry, prices will go down.
I think we should try to curb the inflation rate in 2010 to stay at a one-digit level and we should not let the inflation rate climb to a two-digit level, or it will affect development during the next stage. My view is that we will be able to control inflation during the last months of the year.
vietnamnet, TBKTSG
|
