Inflation is the primary issue in the last months of 2022

DNHN - Analysts agree that by the latter part of 2022, inflation would be the biggest worry.

VNDirect Securities analysts are concerned that the food and food price index may accelerate. As a result, rising input costs and recovering consumer demand have recently driven up the prices of pigs, poultry, and vegetables.

Rising fuel prices increase the cost of transportation and logistics. VNDirect predicts that global gasoline prices will stay high in the foreseeable future owing to the extended Russia-Ukraine war. To counteract expenses, freight and passenger transportation companies will raise freight prices shortly.

Furthermore, the high cost of raw materials raises the cost of local consumer products manufacture. As consumer demand improves in the second half of 2022, manufacturers will be able to raise selling prices to cover input costs, something that was not possible in the previous quarter owing to poor consumer demand.

"As a result, we expect inflation to rise in the next months, with CPI averaging 4.5% in the second half of the year compared to the same period," according to the VNDirect study.

According to Assoc. Prof. Dr Dinh Trong Thinh (Academy of Finance), inflation pressures will progressively reduce and be less burdensome towards the end of the year. Mr Thinh noted that because many nations have raised interest rates and taken steps to contain inflation, the recovery and economic progress have stalled.

Many nations' economies are beginning to recover, and demand for raw materials, materials, accessories, and goods will continue to rise. The Russia-Ukraine war is also causing the price of gasoline and many commodities to stay high, contributing to inflation. However, the fight has been ongoing for four months and, to a lesser extent, the world crude oil price has reached a high level around 110 - 120 USD/barrel and is less likely to grow higher, and maybe lower, due to increasing supply from Venezuela and Iran.

The costs of basic raw materials have levelled out. Inflationary pressure from rising input costs is less severe in the last six months of the year than it was in the first six months.

Some imported raw materials for production inputs in Vietnam, such as iron and steel, copper, aluminium, animal feed, fertilizer, and so on, climbed dramatically in the previous period, but the rise will be considerably reduced in 6 months by the end of 2022.

Vietnam is a significant global food exporter. Inflationary pressure from rising food and food prices will be lower than in many other nations, even if offset by an increase in agricultural, forestry, fishery, and seafood export value.

"Given the aforementioned causes, I believe that inflationary pressures will progressively lessen towards the end of the year. Furthermore, the outlook for economic growth at the end of the year is quite favourable, providing impetus for the government to achieve the objective on important economic balances "Mr Thinh stated.

According to Ms Nguyen Thu Oanh, Director of the Price Statistics Department at the General Statistics Office, inflation pressures are high in the last months of the year. Without immediate, timely, and synchronized answers, meeting the 4% inflation control objective would be extremely difficult.

According to Ms Oanh, inflationary pressure is due to the high price of raw materials in the world, but Vietnam is a country that has to import a lot of raw materials for production, so the price of raw materials costs and prices, put pressure on the production of enterprises and thus pushing up the prices of domestic consumer goods, putting pressure on inflation in the entire economy. The unpredictable price of gasoline, in particular, will impact the price level of many vital items, including agricultural resources, building materials, and transportation.

Furthermore, food and food prices are anticipated to rise in the latter months of the year, especially once the outbreak has been contained and people's consumption demand returns to pre-pandemic levels.

The population's demand for consumer products is expected to rise substantially, as will service activities such as tourism, entertainment, entertainment, and dining out of the home, raising the price of commodities. The price of goods and services rose, putting pressure on inflation.

"We also believe that meeting the National Assembly's 4% inflation objective this year would be a big challenge," Ms Oanh remarked.

Dr Nguyen Bich Lam, former General Director of the General Statistics Office, stated that there is always a trade-off in the economy; if this year's growth is greater than 6.5% and inflation is less than 4%, it is already a good achievement. If we adopt overly stringent measures to keep inflation below 4%, the economy would suffer and our support packages will be less effective. Flexible and cautiously implementing monetary policy to ensure stable interest rates and currency rates will aid economic recovery while avoiding adding to inflationary pressures.

Thanh Ha