Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Dong Tien said yesterday Wednesday May 10 a proposed 8% increase in electricity prices by Electricity of Vietnam would pressure inflation.
Analysts believe that with the power price increase -if they are approved by the government -and recent petrol price increases of 1,500 dong a litre to about 11,000 dong, the efforts by state management authorities to curb inflation will be in vain. The national economy, once again, is facing the possibility of high inflation. Since 2003, the consumer price index (CPI) has increased 33%.
Tien from SBV said he believed the government and the Ministry of Industry would take necessary measures to ensure the development of the power industry, while not volunteering harsh impacts on wider society.
Answering questions from reporters as to whether SBV will make any adjustment to its monetary policy or interest rates to control inflation, Tien said that inflation remains in control. He also said that the CPI increase of 3% for the first quarter of the year was lower than that of the same period of the two last years, thus was not a concern.
However, Tien acknowledged that the increased CPI and other indicators may lead to high inflation. He declined to talk about monetary policies, but asserted that SBV’s most important task these days is to join forces with other state authorities to stabilise the market and hold back inflation.