HCMC – Given the higher consumer price index in Hanoi and HCMC in September, experts have expressed concern that the whole country would see a high CPI this month, which may prompt the inflation pressure to rear its head again in the fourth quarter.
HCMC posts an estimated September CPI growth of 0.97% month-on-month after declining in two previous months while Hanoi’s CPI growth this month is expected at 0.96%.
Vu Dinh Anh, deputy head of the Market and Price Research Institute under the Finance Ministry, explained that September CPI was high due to promotions of home appliances and the beginning of the school year.
He, however, added CPI of Hanoi and HCMC this year did not affect much on the country’s inflation like in previous years, which may be due to the method of price calculation by the General Statistics Office. Anh therefore expected that September CPI of the country would be around 0.5%.
Anh also said that there would be many factors exerting pressure on inflation in the last quarter, including high global prices, and the country’s fiscal and monetary policies.
Recently, the global gold price has hit a record high, and technically that is a signal of high inflation. Global prices of some commodities such as rice and coffee have accelerated, proving the assumption above, the expert said.
From now to the end of the year, the demand for imports will increase strongly and in fact, banks have revised up their deposit rates in the U.S. dollar, meaning the demand for dollars has been increasing, he said.
In terms of macro-economic factors, the fourth quarter usually sees big State spending while credit tends to grow strongly in the last months of the year, which will also put inflation under pressure, Anh said.
Given the credit growth of about 3% in August, Anh said the possibility of credit growth exceeding 25% this year was high. He said the 25% growth target for outstanding loans was the ceiling level set to curb inflation, not the floor to push the economic growth as many people had thought.
“In my opinion, we do not need to strongly push credit growth as the country’s gross domestic products can still increase by 6.5% given the current credit growth,” he added.
The expert said he expected the Government could control the inflation at the single-digit rate this year.
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