Ministry projects 8% inflation

Ministry projects 8% inflation

The country's consumer price index (CPI) was expected to increase 8 per cent for this year against last year if the state continued existing policies on curbing inflation, an official of the Ministry of Industry and Trade (MoIT) said at the ministry's monthly meeting on Monday.

Vo Van Quyen, head of the ministry's Domestic Market Department, said a year-on-year increase of 8 per cent for the national CPI this year was possible.

After the CPI experienced a sudden hike of 2.2 per cent in September due to increases in school fees, the State began to control increases in prices of essential goods, with an aim to curb inflation by the end of the year.

As result, the national CPI was under control this month with an increase of 0.85 per cent compared with last year, Quyen said. The index this month surged 6.02 per cent against December 2011.

He said the ministry predicted supply and demand of many essential goods would remain fairly stable for the rest of the year. However, vegetable prices might increase due to stormy weather.

Additionally, pork prices saw a small increase of VND1,000-2,000 per kilo because high input prices slowed pig production and even stopped some from raising pigs.

Therefore, the ministry proposed the Ministry of Finance and the State Bank of Viet Nam come up with comprehensive solutions to encourage farmers to expand their pig herds, such as by lowering interest rates. This would avoid a situation where pork supply for the domestic market fell short of demand, he said.

By this year end, the smuggling of goods - particularly poultry - would increase, said Dao Minh Hai, deputy director of the ministry's Market Watch Team. Hai recommended that industry and trade departments and cities, as well as provinces, increase market inspections to prevent smuggling.

Industry and Trade Minister Vu Huy Hoang said ministries, sectors and cities as well as provinces should continue working together to ensure that there was enough rice and other foods, as well as other essential goods such as sugar, fertiliser, petrol and oil.

They should continue flexible management for those products and implementation of price stabilisation programmes, Hoang said.

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