Price management will determine CPI level in 2013

To achieve the target of CPI for the whole year not exceeding 7%, price management in the last months of the year will be decisive.

(illustrative photo)

The National Financial Supervisory Commission has just released a report assessing the economic situation in 2013 and forecasting for 2014-2015.

Accordingly, the Committee stated: The macroeconomic environment continues to be maintained stable, creating the premise for stable development in the following years. In particular, inflation continues to be controlled at a low level compared to previous years. However, achieving the growth target of 5.5% in 2013 is a big challenge and growth is likely to only reach 5.3%.

Price regulation will determine the CPI level.

Detailed analysis by the National Financial Supervisory Commission shows that the CPI for the first 8 months increased by 3.53% compared to the beginning of the year. Calculating the seasonal components shows that the adjustment of prices of basic goods and services, exchange rates and public services (healthcare, education) are the main factors driving inflation this year. Specifically, in August, inflation compared to the same period was quite high compared to previous months (7.5%), but inflation excluding seasonal factors (petrol, electricity, public services) was only 3.43%.

Thus, still based on the assessment in the June 2013 report, the National Steering Committee for Food Safety

believes that without changes in the prices of basic commodities, it is likely that

The inflation rate for the whole year of 2013 will be around 5% (higher than the corresponding rate of 4.3% in 2012). Therefore, to achieve the CPI target for the whole year not exceeding 7%, price management in the last months of the year will be decisive.

Adjusting prices of basic goods and public services requires unified coordination, appropriate steps and roadmap.

2013 surplus of 1.5-2 billion USD

Regarding the overall balance of payments, the National Financial Supervisory Commission said that the surplus will continue and forecast a surplus of 1.5-2 billion USD in 2013. However, the balance of payments surplus has decreased significantly compared to 2012 when the surplus in the first 5 months of the year was 1.5 billion USD, down 79% compared to the same period; the capital balance had a surplus of 2.56 billion USD, down 37% compared to the same period in 2012. Exports increased quite well but mainly due to the contribution of the FDI sector.

Exports in the first 8 months increased by 14.7%, but the domestic sector increased by only 3.1%. Similarly, imports increased by 14.9%, while the domestic sector increased by only 4%. Along with that, the financial and monetary market has improved, contributing to a more stable macro-economy and enhancing the economy's ability to supply capital.

Difficult to achieve 5.5% growth target in 2013

The National Assembly's Commission for Economic Affairs also stated that in recent months, economic growth and production have improved but there are still many challenges. The manifestation is that industrial production has increased gradually over the months (the increase in the industrial production index in March, April, May, June, July and the first 8 months of 2013 was 4.9%, 5%, 5.2% and 5.3% respectively) and the number of registered enterprises has increased gradually, although the capital has decreased (the number of newly registered enterprises in 5 months increased by 4.8%, 6 months increased by 7.6% and 7 months increased by 8.4% compared to the same period. The newly registered capital in 4 months decreased by 14.1%, 5 months decreased by 16.3%, 6 months decreased by 19.9% ​​and 7 months decreased by 17.5%).

However, industrial production (IIP) is still lower than the same period last year while agricultural, forestry and fishery production reached the lowest level in 10 years (only 2.4% in the first 6 months of 2013). In particular, the IIP index in the first 8 months of the year reached 5.3%, lower than the same period last year (6.5%) and the PMI index for the past 3 consecutive months has been below the threshold of 50 (threshold for production expansion). The agricultural sector also had a significant decrease from 3.9% in 2011 to 2.28% in 2012 and 1.89% in the first 6 months of 2013; the fishery sector continuously decreased from 4.33% in 2011 to 2.34% in the second quarter of 2013.

At the same time, businesses are still facing many difficulties, especially domestic businesses compared to FDI businesses. In the first 8 months of the year, domestic businesses' exports increased by only 3.1% while FDI businesses increased by 26%; imports increased by 4% compared to 24.1% of FDI businesses.

Given the above situation, the National Assembly Standing Committee assessed that achieving the 5.5% growth target in 2013 is a big challenge and it is likely that GDP growth for the whole year of 2013 will only be 5.3%./.

According to VOV - HV