Limit impact on price level

(Baonghean) - On July 28, the Ministry of Finance reported to the Government on the market price situation in July 2015 and forecasted the situation in August 2015. According to the report of the Ministry of Finance, due to the complicated development of natural disasters, the management and control of market prices must be stricter to avoid negative impacts on consumer psychology and the general price level of 2015.

According to the General Statistics Office, the consumer price index (CPI) in July 2015 increased by 0.13% compared to June 2014. The CPI increase in July 2015 was lower than the previous month, and the average CPI in the first 7 months of 2015 compared to the same period last year increased by 0.86%. This is also the lowest increase since 2002. The gold price index in June 2015 decreased by 1.24%, the US dollar price index increased by 0.09% compared to June 2015. Compared to December 2014, the gold price index decreased by 1.07%, the US dollar price index increased by 2.01%.

Price level is relatively stable

The Ministry of Finance stated that, in terms of commodity group structure, of the 11 main commodity and service groups, 9 groups had CPI increases compared to the previous month. Of which, the largest contributors to the overall increase were the food and catering services group, the clothing, hats, and footwear group; followed by the housing and construction materials group, which increased by 0.22%; the price index of the education group remained almost unchanged. At the same time, the price index of the post and telecommunications group in July 2015 decreased by 0.02% compared to June 2015. In terms of urban and rural areas, the consumer price index in July 2015 in urban areas increased by 0.12%, in rural areas increased by 0.14% compared to June 2015. Compared to December 2014, the CPI in urban areas increased by 0.66%, in rural areas increased by 0.71%.

Household goods counter at Metro supermarket (Vinh city). Photo: Ngoc Anh

According to the Ministry of Finance, among the factors supporting low market price increases, it is noteworthy that the domestic market's supply and demand for goods and services are balanced: pork prices decreased by 0.13%, poultry prices decreased by 0.2% due to abundant output, and livestock households sold their products simultaneously. At the same time, price management and stabilization work continued to be directed and implemented drastically and continuously by ministries, branches and localities during the month. The work of inspecting and controlling compliance with legal regulations on prices, regulations on price adjustment, registration, declaration, price posting and selling at listed prices continued to be strengthened, contributing to stabilizing the market, prices and curbing inflation.

There are still factors affecting the price level.

According to Nguyen Anh Tuan, Director of the Price Management Department of the Ministry of Finance, in July, due to the entrance exam for grade 10 and the national high school graduation exam, the demand for travel and eating out increased. In addition, the cost of electricity, water, service fees, rental costs, and labor also increased, which is also the reason for the increase in prices of some items. On the other hand, according to the annual rule, in July and August, the new school year 2015-2016 is about to start, so the demand and purchasing power of items such as clothes and shoes increased. According to the General Statistics Office, in July 2015, the price of fabrics of all kinds increased by 0.38%, hats increased by 0.26%, shoes increased by 0.18%... compared to June 2015.

In addition, erratic weather is also one of the important factors that put pressure on price levels. Hot weather increases the demand for electricity, water, out-of-home catering services, refreshments, and public transport services. Hot weather also affects the harvest of seafood, vegetables, fruits, etc., so the prices of some of these items have increased compared to the previous month. In addition, the demand for raw materials to prepare cakes for the Mid-Autumn Festival has increased, causing the prices of some raw materials to increase (eggs of all kinds increased by 0.54%, sugar increased by 0.58%, etc.).

No shortages or speculation

According to the Ministry of Finance, in August, the world prices of some fuel products such as finished petroleum products, LPG, and exported rice are forecast to decrease or remain low, creating favorable conditions for regulating domestic market prices. Domestically, the supply and demand of goods continue to be guaranteed in terms of quantity. However, due to preparations for the 2015-2016 school year, the demand for clothes, shoes, books, school supplies, stationery, etc. is forecast to increase, but the increase is not large because the price stabilization program for the 2015-2016 school year has been effectively implemented since the beginning of the year in some localities (typically Ho Chi Minh City). On the other hand, August continues to be the rainy and stormy season, with impacts on life and production that may affect supply, causing local price increases in the areas where the storms pass.

In the price stabilization measures recommendations, the Ministry of Finance proposed that the Government continue to direct ministries, branches and localities to closely monitor the developments of supply and demand, domestic and international market prices; promptly take solutions to stabilize the market and prices, and prevent shortages, speculation, hoarding, and spreading false information that causes sudden and local price increases. Proactively prevent storms and floods according to the Central Government's direction, promptly take measures to overcome consequences, stabilize production and life. At the same time, continue to manage and operate prices according to the market mechanism with State regulation for State-priced goods and price-stabilized goods (electricity, coal, gasoline, public services, etc.).

In case of price adjustment, the Ministry of Finance requests ministries, branches and localities to assess the impact and consider the appropriate level and timing of adjustment, avoid adjusting in one batch or adjusting simultaneously with other items to avoid causing widespread psychological impact, and limit the impact on the market price level in 2015. In particular, it is recommended that the Ministry of Health, the Ministry of Education and Training and localities coordinate harmoniously in the process of building and operating prices for medical examination and treatment services and education services according to the roadmap. At the same time, it is necessary to continue to thoroughly implement the fight against smuggling, counterfeit goods and trade fraud, strictly control the quality of imported fresh food; especially strictly control in key areas, border areas and carry out well the information and propaganda work, publicize information on prices, and price management to create consensus and supervision from public opinion.

Red River