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Finance watchdog urges price control
While inflation control measures should focus on price management - especially in the first months of the year - prices of essential commodities should be adjusted with caution, the National Financial Advisory Commitee said.
The committee advocated forming a "price stabilisation package" that would include roadmaps for adjusting the prices of petrol, electricity and public services. Such a scheme would prevent price adjustments from occurring in the same month, which might push up the consumer price index (CPI).
According to the committee's calculations, if Vietnamese dong devalued 3 per cent against the US dollar, CPI would increase by 0.3-0.4 per cent. If electricity prices increased by 10 per cent, CPI would climb 0.4 per cent. And if the petrol price rose 5 per cent, CPI would climb 0.1-0.15 per cent.
If all three prices were adjusted at the same time, however, CPI might rise by 0.8-1 per cent.
The Government's target of keeping this year's CPI below the 2012 rate was feasible, according to the commission, if both the money supply and aggregate demand remained under control.
Additionally, the committee recommended that any policies intended to resolve bad debts and rescue the real estate market should take into account the amount of money pumped into circulation and the pressure of inflation in order to limit impacts on the year's inflation goal and create a stable macro-economic environment in the medium and long term.
Regarding exchange rate-related policies, the committee said that adjusting the exchange rate was not urgent, as exports had seen positive growth and curbing inflation remained a challenge. Therefore, the commission recommended that exchange rate policies prioritise curbing inflation and stabilising the macro-economy.
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