Experts provide some scenarios for inflation in 2021

09-Jan-2021 Intellasia | Thoi bao Ngan hang | 7:11 AM Print This Post

The assessment of Institute of Economics and Finance’s director, Nguyen Ba Minh, Academy of Finance, was based on 3three basic forecasts. First, it was known that the Covid-19 epidemic in the world had gradually been controlled, Covid-19 vaccines had been vaccinated on a large scale, and production, trade and international exchange activities had been restored. However, global economic growth had not recovered as expected, so the price of raw materials, fuel and essential materials on the world market was difficult to increase sharply.

Second, the African swine fever in Vietnam was being controlled and the re-herding was being restored with many positive signals. Thanks to that, the supply and demand of pork in Vietnam in 2021 would be less stressful, the price of pork would thereby gradually stabilise.

Third, the entire political system of Vietnam had always proactively and actively implemented measures to prevent epidemics, stabilise market prices, administer steadfast monetary policies with the aim of maintaining macro stability, and control inflation as expected.

Also sharing that inflation would be controlled within the level allowed by the National Assembly if there were good coordination, but Nguyen Duc Do, Institute of Economics and Finance, noted that in 2021, when the epidemic was better controlled thanks to vaccines, the global and domestic economy recovered, inflation would follow the upward trend over the same period last year. However, with the year-on-year inflation at a very low level of 0.19%, the average inflation in 2021 would not be high, especially when the economy in 2021 would not be able to recover completely, the expert predicted.

The expert assumed that basic inflation increases by an average of 0.23 percent per month, equivalent to the increase of 2019, while there was a slight increase in world and domestic gasoline prices, the consumer price index (CPI) compared to the same period last year of December 2021 would increase by more than three percent, while average inflation would be at more than two percent. In the case of strong fluctuations in gasoline or food prices like 2019, the average inflation in 2021 would likely remain below three percent, Nguyen Duc Do noted.

Meanwhile, Le Quoc Phuong, former deputy director of Industry and Trade Centre, Ministry of Industry and Trade, proposed two scenarios for inflation in 2021 with relatively high growth. Specifically, in the first scenario, when the pandemic were controlled, the world economy recovered, the price level in Vietnam were under pressure to increase, the average CPI might be from 4 percent to 4.5%. In the second one, when the epidemic were not controlled, the world economy did not recovered, the price level of Vietnam were difficult to increase, the average CPI in 2021 would range from 3.8 percent to 4%.

Ngo Tri Long, former director of the Institute for Market Research and Price, Ministry of Finance, said that inflation in 2021 was still very unpredictable due to abnormal changes in the world market, especially when the Covid-19 epidemic had negatively affected the economy. The economic growth was low, although Vietnam was among the few countries with growth. Hence, inflation was still under unpredictable pressure due to global prices, natural disasters, epidemics, and bad debt in the banking system increasing from the impact of the pandemic, which were major challenges in the near future.

Price management and inflation control in 2021 should continue to be implemented in a prudent, flexible and proactive manner, in parallel with closely monitoring changes in supply and demand, and market prices of essential commodities. Besides, fiscal policies should coordinate with monetary policies and other macroeconomic policies to control inflation under the set target, at the same time, contribute to supporting and solving difficulties for production and business and the lives of people affected by the Covid-19 pandemic, Ngo Tri Long recommended.

Recognising the opinions of experts, Nguyen Anh Tuan, director of the Price Management Department, Ministry of Finance, said that in 2021 to control inflation according to the targets set by the National Assembly, price management and inflation control would continue to exercise prudence, flexibility and initiative. Accordingly, the Ministry of Finance would continue to closely follow changes in supply and demand, market prices of essential goods, especially those with high consumption demand at the end of the year period.

The ministry would also proactively forecast, calculate, and build price management scenarios for goods managed by the State. In case of considering adjustment in 2021, it was necessary to calculate and evaluate the dosage and level of adjustment accordingly and report to the Head of Price Management Steering Committee. At the same time, the authority would strengthen inspection, promptly advise competent units in price management in accordance with market principles and macroeconomic management.


Category: Economy, Vietnam

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