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The inflation peak may fall on Q3’s end
Considering the factors that may affect the prices of goods, Director of the Price Statistics Department under the General Statistics Office (GSO) Nguyen Duc Thang believes that inflation would keep rising considerably until August or September 2011.
In the interview given to Thoi Bao Kinh Te Vietnam, Thang said that Vietnam’s inflation is not only influenced by the demand pull, or push cost, but also by “people’s psychology”. Thang said some people are reasonable when saying that even if Vietnam withdraws cash from circulation, the pressure on the inflation will still exist, because Vietnamese people have a habit of making transactions in gold and dollars; gold and dollars are also considered “means of payment”.
Regarding the “push cost”, GSO has announced a series of new indices, including the indicator of the sale prices of industrial and agricultural producers. What do the indicators tell us?
All the quarterly indicators are higher than the consumer price index (CPI). Especially, the indicator of the sale prices of agricultural producers increased by 23 percent in the first quarter of 2011 in comparison with the same period of the previous year, while the indicator of the sale prices of industrial producers increased by 15 percent.
According to economic laws, the producer price index always increases before the CPI increases, and the index decreases before the CPI decreases. When the producer price index is higher than CPI, this can be understood that the CPI will increase further.
The CPI will not go down in the second quarter of the year because the government’s resolution No 11 on measures to fight against inflation is still under implementation and it will take more time to bring effects.
By announcing some new indicators, does GSO want to clarify the factors that may affect the production costs?
In fact, GSO has been calculating the indicators since 1995. Now we are trying to release the figures to the public.
Besides the calculation of the influences from the push cost, will GSO calculate the demand-pull information, the core inflation?
In fact, the core inflation has been calculated by GSO and the State Bank of Vietnam, in accordance with international practice.
Core inflation is a measure of inflation which excludes certain items that face volatile price movements, notably food and energy. Core inflation eliminates products that can have temporary price shocks. It is necessary to put temporary shocks aside in order to find out if there are any problems with monetary policies.
Recently, the taskforce on the domestic market management has predicted that the CPI in April would increase by 1.6-18 percent over March. What would you say about that?
I also think that the CPI increase in April will still be high and the inflation still cannot be eased immediately. I have to remind you that the prediction was given at the taskforce’s meeting at the time when the petroleum price had not increased (The petroleum price has increased since March 29 – reporter). Meanwhile, the food prices have also increased sharply.
While the worries about the rice price can be eased, people now have worries about the increasing prices of pork, the main kind of meat in Vietnamese people’s meals. Besides, the prices of many products have increased as planned, including electricity. , The basic wage will also increase.
I believe that the CPI increase will still be high in the second quarter, even though it will be lower than that in February or March. However, the 1.4-1.5 percent increase will still be considered “big increase” because the CPI is already very high.
In general, the monetary policies will show impacts after six months.
vietnamnet, TBKTVN
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