CPI forecast in 2022 from 3.3 - 4%

DNHN - On the morning of July 5, the Institute of Economics and Finance (Academy of Finance) held a seminar on market movements and prices in Vietnam in the first 6 months and forecast for the last 6 months of the year. At the conference, many economic experts agreed that inflation in 2022 will still be under control, below the set target of 4%.

Assoc., PhD. Nguyen Ba Minh - Director of the Institute of Economics - Finance, said that the average CPI in 6 months increased by 2.44% compared to the average of the same period in 2021, CPI in June 2022 increased by 3.18% compared to December 2021 and increased by 3.37% compared to June 2021.

Core inflation increased by 0.44% over the previous month, up 1.98% compared to July 2021. In 6 months on average, core inflation increased by 1.25% over the same period in 2021, lower than the average CPI (2.44%) reflecting consumer price fluctuations mainly due to food and petrol prices.

Commenting on inflation in the first 6 months, Mr. Nguyen Ba Minh said that the increase in CPI was mainly due to the increase in gasoline prices by 51.83% over the same period last year, making the overall CPI increase by 1.87 percentage points; food service prices outside the family increased by 3.5% over the same period last year, causing the overall CPI to increase by 0.3 percentage points.

One reason affecting CPI's increase in the first 6 months of the year was that the price of home maintenance materials increased by nearly 8% over the same period last year and the price of cement, iron and steel, sand, etc., increased in line with the price of raw materials. in, made the overall CPI increase by 0.16 percentage points.

Given the year-end inflation forecast, according to Mr. Nguyen Ba Minh, the average CPI in 2022 compared to 2021 will increase at 3.3% - 3.9%. The cause contributing to curbing inflation comes from many factors. In particular, the situation of epidemics (Covid-19, monkeypox ...) in the world is still complicated, the future of armed conflict between Russia and Ukraine is difficult to predict, political conflicts in the world still remain many uncertainties, causing the global economic growth to show signs of deceleration and making it difficult for the prices of raw materials and materials on the world market to remain at the highest levels in recent months.

Besides, agricultural production in Vietnam has developed quite well in the past time with many positive signals showing the supply and demand of agricultural products (pork, rice, vegetables, etc.) in Vietnam in the last months of 2022 will not be stressful, helping the prices of food and food items not to spike.

One reason to "hold" the rise in inflation is that the whole political system of Vietnam is always proactive and actively implements measures to prevent epidemics, stabilize market prices, and administer monetary policy, persisting in the set goals of maintaining macroeconomic stability and controlling inflation…

According to Dr. Nguyen Duc Do - Deputy Director of the Institute of Economics and Finance, with the current inflation rate, the room to control inflation below 4% this year is still quite large.

Dr. Nguyen Duc Do stated that if the average inflation rate for the entire year exceeds 4%, the average inflation rate for the final six months of the year must exceed 5.56 %. In other words, the CPI must increase by an average of more than 0.7% per month for the remainder of 2022. Despite the sharp increase in gasoline and raw material prices during the first six months, CPI has increased by an average of only 0.5% per month.

Currently, the price of gasoline and the prices of many materials in the world are on a downward trend when the world economy slows down and the Fed raises interest rates strongly with high frequency. Therefore, the more likely scenario is that the price of gasoline and raw materials will not increase sharply in the near future and the CPI growth rate in the last 6 months of 2022 will be lower than 0.5%/ month. According to this scenario, Dr. Nguyen Duc Do forecasts average inflation this year will be under control, at less than 3.5%.

Dr. Le Quoc Phuong - former Deputy Director of the Center for Industry and Trade Information (Ministry of Industry and Trade), proposed two scenarios, in which the average CPI is forecasted to increase by around 4%.

Proposing measures to stabilize prices from now until the end of the year, many opinions suggest that it is necessary to implement flexible and proactive measures to control inflation. In which, the Government should focus on stabilizing prices to remove difficulties in production and business of enterprises and people's lives; at the same time, closely combine fiscal and monetary policies, avoiding synergistic effects on inflation.

Along with that, the authorities must closely monitor the supply and demand movements, the prices of essential commodities; do not simultaneously increase the prices of items in the current context.

Vu Vinh Phu, an economic expert, suggested that the government and ministries continue to implement a number of fundamental solutions, such as ensuring major economic balances, reconnecting supply chains in the domestic market, etc., as well as import-export relations with other nations. Continue to promote sustainable production, prioritize the domestic market in terms of supply, and export goods. Implement fiscal and monetary policies effectively. Ensure adequate budget collection, cultivate revenue sources, encourage businesses to tell the truth, and create a level playing field for businesses. Effective budget management, anti-waste. Reduce administrative costs, money, and time for businesses and encourage infrastructure investment. Implement an active credit policy, recruit idle capital, and utilize bank loans effectively. Strictly manage the stock market, real estate bonds, along with restoring domestic demand, organize price control to prevent speculation, smuggling, and unreasonable price increases, even for goods that were previously not a part of the state to set prices as directed by the government in recent days, especially for essential items serving the daily needs of Vietnamese households. In addition to reducing input costs for goods, materials, and raw materials, it is necessary to organize the national distribution system well, reduce unreasonable intermediaries, and the expressions that rely on the strength of sales and brands to force discounts on suppliers of some retailers manipulating the market to the detriment of society's producers and consumers. Better conduct more accurate statistics to serve as a basis for timely direction, thereby contributing to macroeconomic stability, inflation control, and social security. If the aforementioned conditions are met, the inflation rate for this year will likely not exceed the National Assembly's target of 4%, thereby contributing to the successful completion of the tasks of the 2022 plan and laying the groundwork for rapid and stable growth in the coming years.

An Thảo