The weather is relatively stable and favorable for agricultural production, so food, vegetables, and fruit are plentiful, and prices do not fluctuate significantly.

On the morning of August 3, the Steering Committee held a meeting to discuss price management in the last months of the year. Deputy Prime Minister Le Minh Khai - Head of the Steering Committee for Price Management chaired the meeting.

The price is stable in line with the proposed scenarios

Deputy MoF Nguyen Duc Chi stated at the meeting that the global goods market was intertwined with a wide variety of economic, political, and social factors in the first seven months of 2023. Major economies have experienced low growth, while consumption is weak, trade barriers are increasing and a lot of countries continue to maintain tight monetary policy (the Fed kept raising interest rates by 0.25% on July 26, 2023).

Furthermore, the pressure on public debt, the bad debt of businesses, risks in financial and monetary markets, and real estate are still high in some countries; an additional small bank in the US is under special control; potential risk factors of the US banking system; and there are some new risks and challenges in global food security ( The fact that Russia and India have decided to stop exporting rice to ensure domestic food security affects the world's rice supply). Moreover, factors such as extreme weather conditions occurring in different places, prolonged drought on a large scale, storms and floods, and other natural disasters striking in various countries have affected the domestic price level.

Domestic electricity prices have been adjusted upwards since May 4, 2023. However, domestic market prices were generally stable, inflation has been under control and on a gradual downward trend. Because the weather has been relatively stable and favorable for agricultural production since the beginning of the year, the supply of food, vegetables, and fruits has been plentiful, and agricultural product prices have not fluctuated significantly.

Pork prices tended to fall in the first three months of the year due to slow consumption, then have risen again since May due to increased consumer demand during the tourist season. Prices for some energy fuel products in the country, such as gasoline and liquefied petroleum gas, have fluctuated due to the impact of global prices, but they have fallen sharply on average compared to the same period last year.

According to data from the General Statistics Office, the consumer price index (CPI) increased by 0.52% in January 2023 compared to the previous month, by 0.45% in February 2023, 0.23% in March 2023, 0.34% in April 2023, 0.01% in May 2023, 0.27% in June 2023, and 0.45% in July 2023. The CPI in July 2023 grew by 2.06% over the same period last year. The CPI climbed by 3.12% on average in 7 months over the same period last year; core inflation went up by 4.65%.

In general, the market for essential goods has had no abnormal fluctuations in the first months of the year, supply has been guaranteed, and basic goods prices have remained stable, according to the price management scenarios set out by the Prime Minister's Steering Committee for Price Management

The average CPI is expected to rise by 3.2 - 3.7% in 2023

The MoF has launched two inflation scenarios for the third quarter of 2023 and the remainder of the year.

The first scenario assumes the last 5 months of 2023 compared to the same period last year. In particular, food prices increase by 3%; rental housing prices climb by 8%; housing maintenance materials prices increase by 3%; medical service prices grow by 4%; and gas and petrol prices decrease by 10%. The average CPI in 2023 is anticipated to rise by approximately 3.2% in comparison with the year 2022.

In the second scenario, in case gasoline prices fall by 5%, food prices rise by 5%, and medical service prices increase by 6%. The average CPI in 2023 is expected to go up by 3.7% compared to 2022.

According to the MoF, based on these aforementioned scenarios, the average CPI in 2023 will rise between 3.2 and 3.7%. The General Statistics Office predicts an average CPI of 3% to 3.5% (assuming that educational service prices do not rise in accordance with the roadmap outlined in Decree No. 81/2021/ND-CP). The State Bank of Vietnam also forecasts average inflation in 2023 to increase by 3.7% (plus or minus 0.5%).

In terms of inflation control fiscal space, the MoF estimates that if the CPI continues to rise at the same rate as the previous month, the CPI will rise by 1.61% per month in the remaining 5 months, ensuring the average inflation control target of around 4.5% in 2023.

When it comes to proposing price management measures in 2023, the Ministry of Finance stated that an increase in the fiscal space for inflation control is a favorable condition for adjusting the prices of some State-managed goods in line with the market roadmap after implementation has been delayed in recent years.

The impact of price adjustments for State-managed goods on the CPI in 2023, on the other hand, is dependent on the timing of the promulgation of legal documents governing the prices of goods of ministries and branches. In addition, the fact that core inflation is at a much higher level than general inflation indicates that high inflation risks are long-term and can last for upcoming years.

As a result, concerning the management of prices of goods managed by the State, it is necessary to take advantage of fiscal space for the National Assembly's 4.5% inflation target in 2023 to proactively implement price plans under the prescribed roadmap and in line with the fluctuations of price formation factors due to market movements, while also reducing pressure on the following years.

To be proactive in managing and administering prices and controlling inflation in the remaining months of 2023, the MoF stated that ministries, branches, and localities must actively promote the implementation of solutions proposed by the Government and Prime Minister.

Furthermore, it is crucial to continue to closely monitor global prices and inflation, promptly warn of risks of causing domestic inflation, and effectively and flexibly perform the role of regulating and stabilizing prices of State-managed goods.

Ministries, sectors, and localities need to fully prepare sources of goods to timely meet the needs of people, particularly food, victuals, essential consumer goods, and services to serve high consumption demand during national holidays and Tet holidays.

Simultaneously, it is essential to continue to implement active and flexible monetary policy in close coordination with fiscal policy and other macroeconomic policies to control inflation in line with the set goals.

In the context of relatively wide fiscal space for inflation for state agencies to adjust the prices of State-managed goods, the 2023 inflation target has been approved by the National Assembly to be at 4.5%. Ministries and agencies must take advantage of the time to take the initiative in early plans to adjust the prices of State-managed goods, avoiding accumulating in the final month of the fiscal year or concentrating at the same time to limit synergistic effects and simultaneously to reduce pressure on price management and inflation control in the following years.

Moreover, there should be a plan to mitigate the negative effects of price changes on the poor and vulnerable groups in the face of the impacts of the price adjustment of essential commodities./.