Keeping inflation under control provides platform for growth: Finance minister

Vietnam’s independence in the supply of food, which accounts for 40% of the commodity bundle used for the calculation of the consumer price index (CPI), has been a key factor in helping the country to keep inflation under control.

Minister of Finance Ho Duc Phoc in the discussion session. Source: quochoi.vn

Minister of Finance Ho Duc Phoc gave the remarks during a National Assembly’s interpellation session held today [June 8].

“This is the golden timing for Vietnam to make breakthroughs in development as countries around the world are facing high risks of inflation,” Phoc said, referring to the fact that the economy is capable of meeting local consumption demands.

Previously, NA Deputy Hoang Van Cuong from Hanoi expressed concern over the risks posed to Vietnam by rising inflation in countries around the world, given the country’s high level of economic openness and its dependence on trade.

“Rising prices of import materials would lead to higher prices of goods and products in the domestic market, which eventually put pressure on efforts to contain inflation,” he noted.

In response, Minister Phoc noted controlling inflation has been a key issue in the functioning of any economy, including Vietnam's, for which measures are needed to curb the inflation rate for growth and to ensure social welfare.

In April, the inflation in the US expanded by 8.3% year-on-year, Europe by 8%, Singapore by 5.4%, South Korea 4.8%, Thailand 4.6% and Vietnam by 2.25%.

According to Phoc, the Government would continue to maneuver fiscal and monetary policies flexibly and effectively to prevent inflation from rising, including tax cuts and tightening the management of prices of strategic commodities under state administration.

Another key measure pointed out by Phoc is to support the development of the business community to keep social welfare intact, along with accelerating economic restructuring via digitalization, innovation, and infrastructure development.

“The core objective of the economy is to ensure monetary and fiscal policies benefit the businesses and individuals,” Phoc said.

“Positive business performance would help create jobs and ensure social welfare, and subsequently leading to GDP growth,” he continued.

Phoc called for every administrative reform, effort for digitalization, and scientific advancement to be for the benefit of the people and businesses, saying these are the core solution to address inflation risk.

Governor of the State Bank of Vietnam Nguyen Thi Hong said inflation is a global issue, and it is affecting Vietnam’s economy due to its deep integration into the world’s economy.

Hong noted the Government has been closely monitoring the inflation situation to keep it under control. “Vietnam’s 2.25% inflation rate is mostly due to the rising prices of commodities in the global market,” she added.

In the coming time, Hong said the central bank is committed to managing monetary policy in line with the macro-economic situation and the implementation progress of economic recovery packages.