Viet Nam Human Rights
Inflation would be controlled in 2022
16/1/22
Experts have forecast that inflation will remain under control in 2022 although there will be pressure in the year.
Nguyen Ba Minh, Director of the Institute of Economics and Finance, said the average consumer price index (CPI) in 2022 will increase roughly 2-3 percent compared to 2021.Inflation in 2022 will be well controlled as it will be difficult for global raw material prices to increase significantly due to the complicated spread of new variant Omicron, trade wars and political conflicts in the world.
Purchasing power in the domestic market will be still weak because the income of workers has been reduced, as production stagnated during the pandemic.
Minh forecast gasoline prices to be stable at USD 65-80 per barrel.
He explained if the oil price increases sharply, the US will increase the supply of shale oil. At that time, the US will gain the oil market share of OPEC and OPEC countries, meaning the latter will then have to increase the supply to cause oil prices to fall again.
Discussing pork prices in 2022, Minh said the domestic supply of pork is quite abundant. The product’s price has decreased sharply compared to December 2020 and will also be stable at 45,000-60,000 VND per kg until the end of 2022.
Expert Nguyen Duc Do also agreed that CPI in 2022 will remain at a low level. Though the economy is recovering, the output of 2022 will still be below potential.
If Vietnam’s GDP in 2022 grows by 6.5 percent, the Government’s target, or even 8-9 percent as some forecast, the average GDP growth rate in the 2020-2022 period is only at 4-5 percent, much lower than 6 percent in the 2011-2020 period, he explained.
However, experts said controlling inflation in 2022 will not be easy as the index can increase quite high from the beginning of this year, in the wake of the global economic recovery and commodity prices on an upward trend.
The economic recovery in 2022, under the impacts of economic development support packages, will cause consumption and investment demands to increase, putting pressure on prices.
Experts suggested pandemic prevention will provide the prerequisite for production and market stability to keep CPI under 4 percent this year, as set by the National Assembly.
According to economist Ngo Tri Long, should closely monitor supply and demand sources in the domestic market, especially before Lunar New Year, to take appropriate measures to control prices.
At the event, representatives from the Ministry of Finance’s Price Management Department said the department will closely monitor the world’s economic developments and inflation, promptly taking effective action in managing domestic production and balancing local supply and demand in a move to successfully control inflation right from the first months of 2022.
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All comments [ 20 ]
Despite pressure on inflation this year in Vietnam, it will be under control and the National Assembly's target of 4 per cent is still feasible
Vietnam's monetary policies in 2022 will aim to keep inflation under control, while supporting the country's economic recovery
Country's economic growth has traditionally relied heavily on increased credit, though authorities have been trying to reduce this dependence.
Total bank lending in Vietnam as of Dec 22 rose 12.68% from the end of 2020
Vietnam's credit growth next year is expected to rise to around 14%
Inflation this year would be well below the targeted 4% and the country's foreign exchange reserves were now above $100 billion.
The ratio of non-performing loans in the banking system is on the rise due to the coronavirus pandemic and could rise further.
The government has official economic growth targets of 6.5% for both this year and in 2022, but some analysts have warned that due to the pandemic growth this year could be 3% or lower.
Though there will be pressure on inflation in 2022, it will remain under control and the National Assembly’s target of 4% is still feasible.
Purchasing power in the domestic market will be still weak because the income of workers has been reduced, as production stagnated during the pandemic.
Vietnam’s growth at 6.5-7 percent from 2022 onward as it expects a sustained global recovery will ensure strong demand for Vietnamese products in its main export markets of the U.S, the E.U. and China.
The rebound will also be supported by the vaccination of at least 70 percent of the adult population by mid-2022, preventing severe new outbreaks
Though the economy is recovering, the output of 2022 will still be below potential.
controlling inflation in 2022 will not be easy as the index can increase quite high from the beginning of this year, in the wake of the global economic recovery and commodity prices on an upward trend.
Vietnam has achieved this vaccination target by the end of 2021 and is focused on giving the booster shot to deal with the new Omicron variant.
One of the key supporting factors for growth is that the country will likely achieve its target to fully vaccinate 70 percent of the population this year
Services are likely to recover with the resumption of tourism and entertainment in the second quarter if the Covid-19 situation remains under control.
2021 was another challenging year for Vietnam as the Delta variant forcing many economic activities to shut down in the third quarter.
Without special support programs, without fiscal and monetary stimulus packages, Vietnam will miss opportunities, be left behind, and not realize its five-year economic development targets
The ratio looks low but it is actually a matter of serious concern.
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