Hanoi (VNA) 𒁏– The General Statistics Office (GSO) has forecast that that the Consumer Price Index (CPI) will continue to increase in the last two months of 2023. 

Nguyen Thu Oanh, Director of the GSO’s Price Statistics Department, spoke to the Vietnam News Agency (VNA) about the rise in the CPI.

Reporter: Could you share your view on market developments and factors affecting CPI in the first ten months of this year?

Ms Nguyen Thu Oanh𝐆: The CPI in October increased by 0.08 % compared to September. The main reason was that some localities increased tuition fees and domestic rice prices surged following rising prices of exported rice.

The CPI in October witnessed a 3.2 % increase compared to December 2022 and 3.59 % year-on-year increase. The ten-month CPI hiked by 3.2 % year on year on average with the core inflation increasing by 4.38 %. The ten-month average air ticket price index increased by up to 75 % over the same period last year affected by factors that increased CPI over ten months. There was an upward trend in airfares passengers’ travel needs. During holidays, Lunar New Year and summer vacations, market demand has affected air transport prices as well as train ticket prices (increasing by 30%). Passenger car ticket prices also increased by approximately 8%. The CPI increase also includes the education price index that increased by 7 % year on year as some localities adjusted tuition up for the 2023-24 school year. The price indexes of housing, construction materials and food increased by 6.74% and 5.48 %, respectively, over the same period last year. Vietnam Electricity adjusted the average electricity retail price up 3 % from May 4. On the contrary, there were several factors that helped the CPI reduce in the ten months. The domestic oil and petrol price index decreased by 13% year on year following global price fluctuations while the domestic gas price index reduced by 8% over the same period last year following global prices.

Reporter: How do you evaluate the market price trend in the last months of 2023?

Ms Nguyen Thu Oanhꦫ: Compared to the same period last year, the CPI in the first months of the year decreased. But then from July it gradually increased again.

Specifically, January's CPI increased the highest at 4.89 %, then gradually decreased. In June, the CPI was recorded at only 2%, July 2.06 %. October’s CPI increased to 3.59 %. The GSO predicted that the CPI will continue to increase gradually in the last months of the year due to several main factors that may affect market prices and increase inflation. Domestic rice prices are forecast to increase following rising export rice prices thanks to increasing demand in Asian and African markets, especially after Indonesia announced that it would import 1.5 million tonnes of rice for its national reserves until the end of 2023. Meanwhile, Vietnam and Thailand are the two main rice suppliers of Indonesia. In addition, a 20% increase in base salary will impact prices of consumer goods and services. Global oil and petrol prices are likely to increase again. The International Energy Agency (IEA) forecast that the world will continue to be in short energy supply in 2023 and some countries are making efforts to make compensation for the current low reserves. If the global oil and petrol prices increase at the end of this year, it will immediately impact domestic oil and petrol prices and thereby impact the CPI. Prices of food, beverages, and garments often increase at the end of the year due to increased shopping demand, especially during the Lunar New Year (Tet) Festival. Tourism services will continue to recover, affecting the prices of many other products in restaurants, culture, and entertainment.

Reporter: Could you please share some solutions to stabilize the market price level and control inflation in the last months of the year?

Ms Nguyen Thu Oanh♔: In that context, the GSO has proposed a few solutions.

The Government, relevant ministries and sectors need to closely monitor global price developments, inflation and promptly issue risk warnings on prices and inflation in Vietnam to take appropriate response measures to ensure supply and stabilise domestic prices. We need to prepare adequate supplies to promptly meet consumption needs, especially food items and essential consumer goods and services. Policies on exemption, reduction, and extension of taxes, fees, charges, and land rent that have been issued need to be implemented effectively. It is necessary to control the prices of input materials and increase the use of domestic raw materials to gradually replace imported sources. The GSO proposed strengthening inspection and supervision of measures to declare prices, post prices, and publicize price information. Speculation and unreasonable hikes of prices must be strictly punished. There is still room for adjusting service prices managed by the State in the last months of the year, but it is necessary to decide the extent and timing of the adjustment to ensure social stability, minimise negative impacts on the poor, avoid causing inflation in the economy. The Government needs to continue to operate flexibly monetary policy, and other macroeconomic policies to control inflation./.