Deputy Prime Minister Vuong Dinh Hue also said that there is not much room for further price rise at meeting of the National Steering Committee on Price Management in Hanoi on October 19. Deputy Prime Minister Vuong Dinh Hue is head of the committee. According to the Ministry of Planning and Investment’s report, the CPI for the first nine months of this year rose 2.07 percent year on year and 3.14 percent from December 2015.
There were many reasons for the CPI increase, mostly driven by the adjustment of prices of medical and educational services under the Government’s policy of align the prices in line with market rules. One of which is a 29.09% surge in healthcare costs as upward adjustments to healthcare services began to take effect from March. Increased tuition fees also pushed up inflation.
In addition, a number of long holidays such as Lunar New Year, Hung Kings Commemoration and Reunification Day boosted demand for food and entertainment services. Other factors included higher fuel costs and higher food prices as a result of extreme weather, drought and saltwater intrusion. A raise in minimum wage are also factors to CPI growth.
Deputy Prime Minister Vuong Dinh Hue urged the Ministry of Health along with the Ministry of Finance and the Vietnam Social Insurance to host a conference on medicine bidding this month to bring the price of medicine down. The Ministry of Health was also ordered to careful calculated the adjustment of medical services prices in order to control inflation.
He stressed that the price of health services for people who do not have health insurance should not be raised in 2016 and told ministries to carefully consider the timing and roadmap for health services price increase next year.
The prices of foodstuff tend to increase in the year-end months and accelerated public investment may affect inflation, so the task of keeping CPI rise under five percent will be difficult, requiring strict management, the Deputy Prime Minister added.
At the meeting, Deputy Prime Minister Vuong Dinh Hue also directed the State Bank of Vietnam (SBV) to continuously stabilise the core inflation at between 1.81-2 percent while taking necessary measures to maintain and partly reduce lending interest. The SBV should direct the capital flow into priority fields and keep good control of credit growth and structure.
Meanwhile, the Ministry of Industry and Trade was ordered to maintain stable electricity’s retail price in the last three months of this year, and effectively managing the prices of other products such as sugar, oil and petroleum.
The Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development are to direct departments and localities to stock up sufficient supply of goods for domestic market, especially on Tet holiday and Christmas Day.
The Ministry of Transport in conjunction with the Ministry of Finance will work to reduce fees for 10 build-operation-transfer (BOT) stations in October 2016.