Careful consumer spending drives down inflation rate
Careful consumer spending drives down inflation rate
Changing consumer habits have helped to drive down the rate of inflation significantly this year, experts told Thoi Bao Ngan Hang (The Banking Times).
The General Statistics Office (GSO) announced on Wednesday that the December consumer price index (CPI) fell by 0.24 per cent from the previous month, declining for the second time consecutively in the last few months of the year. This also marked a year-on-year increase of just 1.84 per cent, the lowest growth in the past 13 years.
The average CPI this year showed a 4.09 per cent increase compared to the 2013 average, lower than the government's five per cent target.
GSO's CPI Department Deputy Director Do Thi Ngoc said that consumers were more careful in spending and households no longer speculated on goods during Tet (Lunar New Year) and other festivals and holidays, like they did in the previous years, and these helped to curb price hikes.
Head of the Party Central Committee's Economic Commission Vuong Dinh Hue agreed, adding that more convenient shopping conditions had led to this change. "This is a good point," he said.
"Low inflation is a valuable gift for macro-economic stability and people's lives," said Le Dang Doanh, former director of the Central Institute for Economic Management.
Ngoc added that the national goal of controlling inflation had been reached, clearing the way for monetary policies that stimulate production and business activities, and this make the interests from people's savings "become more meaningful".
Referring to some economists' concerns that weak demand in the economy had resulted in the low CPI increase, she said, "These worries have no basis...The low increase this year is not due to [weaker] consumer demand."
She noted that the overall retail volume of goods and services increased about 6.5 per cent in 2014, while it rose by 4.7 per cent in 2011, 6.2 per cent in 2012, and 5.6 per cent in 2013.
Hue said that the total demand was just lower than expectations, but did not decline. "The economy is still growing," he affirmed.
Economist Ngo Tri Long told Nhan Dan (People) online that the nation's achievement in curbing inflation should not be considered a complete success, as economic growth hadn't shown clear improvement.
The economy grew about 5.93 per cent this year, while public debts and bad debts remained high. Businesses also continued to struggle in the face of an ailing property sector and an unstable stock market, he added.
Long anticipated that the inflation stability will continue in 2015, with global goods prices forecast to be stable and Viet Nam's exports as well as balance of payments and exchange rates to see positive profiles.
"These will be important bases for intensifying measures to support enterprises and foster economic growth," he said, urging the country to promptly restructure the economy with suitable supporting mechanisms.
