Six factors putting pressure on inflation in 2024

ANTD.VN - Electricity prices and prices of some state-owned services may increase, which are factors putting pressure on inflation in 2024.

Many factors affect inflation in 2024

In 2023, Vietnam successfully controlled inflation according to the target set by the National Assembly. The average consumer price index (CPI) in 2023 increased by 3.25%, lower than the target of 4.5% for the whole year of 2023.

In 2023, inflation will be contained by a sharp decrease in prices of some commodity groups. Specifically, the domestic gasoline price index in 2023 will decrease by 11.02% compared to 2022 according to fluctuations in world prices, causing the general CPI to decrease by 0.4 percentage points; the price index of the kerosene group will decrease by 10.02%;

The gas group price index decreased by 6.94% compared to 2022, causing the general CPI to decrease by 0.1 percentage points; The postal and telecommunications group price index decreased by 0.81% compared to the previous year due to the decrease in the price of old-generation mobile phones.

These are all essential goods, accounting for a high proportion in the CPI basket of goods.

However, commenting on inflation in 2024, the representative of the General Statistics Office said that there are 6 main factors that strongly affect inflation this year, including: World input material prices are high, Vietnam is a country that imports many raw materials for production, so it will affect costs and prices, creating pressure on business production and thereby pushing up domestic consumer goods prices.

In addition, the increase in the value of the US dollar further increases the cost of importing raw materials, putting pressure on domestic commodity prices.

In addition, the prices of some state-managed services will be adjusted to correctly and fully calculate all factors and implementation costs into the prices of medical services and education tuition fees, which will increase the CPI.

Notably, EVN may continue to increase electricity prices when input materials such as gasoline and coal are at high levels.

Wage reform and regional minimum wage increase from July 2024 will lead to an increase in prices of household goods and services.

In addition, prices of essential consumer goods such as food, beverages, clothing, equipment and household appliances often increase according to the law in the last months of the year and on holidays and Tet. Natural disasters and epidemics can affect food prices in some localities, which will also increase the CPI;

Recovery support programs, public investment disbursement by the Government, tourism services... are expected to put pressure on price levels in the coming time.

However, the representative of the General Statistics Office said that in addition to factors that can create pressure on inflation, there are also factors that help reduce pressure on price levels such as support for reducing environmental taxes on gasoline and oil, and reducing VAT that will continue to be implemented in 2024.

To control inflation in 2024 to achieve the target set by the National Assembly, the General Statistics Office recommends that the Government, ministries, branches and localities closely monitor price and inflation developments in the world, promptly warn of risks affecting prices and inflation in Vietnam to have appropriate response measures to ensure supply and stabilize domestic prices;

Ensure smooth supply, circulation and distribution of goods and services, especially for petroleum and strategic goods that are likely to be affected by disruptions in the global supply chain and the unpredictable and complicated Russia-Ukraine geopolitical conflict.

For essential goods such as food, pork, gasoline, gas, etc., it is necessary to closely monitor prices to have appropriate management solutions and proactively prepare sources of goods at the end of the year to limit price increases. At the same time, it is necessary to have measures to control and stabilize prices, strictly handle violations, and avoid unreasonable price increases and spreading false information that causes market instability.

In the management work, the General Statistics Office recommends that ministries, branches and localities should develop and calculate the dosage and timing of price adjustment of goods and services managed by the State (electricity, medical services, educational services) in accordance with the inflation control target. It is necessary to promptly develop plans and roadmaps for price adjustment of goods to avoid being passive in policy coordination.

At the same time, the Government continues to operate monetary policy proactively, flexibly, and cautiously, closely coordinating with fiscal policy and other macroeconomic policies to control inflation according to the set target;

Strengthen information and communication work, provide timely and transparent information, create public consensus on the Government's price management work, stabilize consumer psychology and stabilize inflation expectations.

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