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Pork prices put pressure on VN’s CPI

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People shop at Aeon Mall Long Bien, Ha Noi. Pork prices were putting pressure on inflation in 2020. VIET NAM NEWS/ASIA NEWS NETWORK

Pork prices put pressure on VN’s CPI

The goal of keeping Vietnam’s inflation below four per cent this year would depend heavily on pork prices, heard a conference co-organised by the Academy of Finance and the Department of Price Management under the Ministry of Finance on Friday in Hanoi.

Speaking at the conference to discuss inflation in 2020, Nguyen Duc Do, deputy director of the Institute of Economics and Finance, said the prices of fuel, pork, healthcare services, education and power and risks from natural disasters would put pressure on the consumer price index (CPI) in the coming 12 months.

Among them, pork prices would be the decisive factor for CPI, Do said.

After shocking increases in pork prices in the fourth quarter of last year due to African swine fever, the prospect of keeping CPI below four per cent this year was no longer a certainty.

Do pointed out three scenarios for inflation this year.

In the best scenario, in which pork prices would plummet from this month as a result of the end of African swine fever, successful pig farming and government efforts to stabilise pork prices, 2020’s CPI would stand at around three per cent.

In the second scenario, CPI would sit at around 3.5 per cent which would involve pork prices remaining high in the first quarter but starting to drop from the second quarter.

In the worst case scenario with African swine fever continuing to spread in the first quarter, keeping inflation below four per cent would be very difficult.

We need to be cautious and flexible with price management policies, expert Ngo Tri Long said.

Although the government was successful in keeping inflation below four per cent last year (at 2.76 per cent), pressure on CPI would be high in 2020, Long said, adding that close monitoring of the cost of essential goods was needed to ensure adequate supplies, especially over the Tet – Lunar New Year – holiday.

The Department of Price Management forecasts that pork prices will remain high in the first months of this year while prices of healthcare and education services are likely to increase.

The Ministry of Finance has proposed halting price hikes for goods and services that had already been fixed by the government, such as healthcare, education and electricity, in the first quarter of the year. Any increases should be considered to avoid creating huge pressure on inflation while pork prices remained high.

Le Quoc Phuong, former deputy director of the Ministry of Industry and Trade’s Industry and Trade Information Centre, said that in the long term, measures were needed to prevent distorted information which caused market instability.

According to Bao Viet Securities, increasing prices of goods and services fixed by the government would push up overall CPI by one per cent this year.

The company projected average CPI for 2020 at around four per cent.

CPI last year expanded at a three-year low of 2.79 per cent.

VIET NAM NEWS/ASIA NEWS NETWORK

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