Essential goods prices stable for now

Several factors may help restrain prices of essential goods this month, a report released by the Price Management Department under the Ministry of Finance says.

 

Local supplies of essential commodities for production and consumption were considered one of the most important factors contributing to the nation’s effort to curb inflation.

Along with a bunch of promotion campaigns with price reductions during Victory Day and International Labour Day holidays, the prices of many essential commodities such as rice, sugar, cement, steel and fertiliser, were likely to drop in May, the report said.

Government Resolution 11 on curbing inflation, issued in February, has impacted on the domestic market, shown by a recent appreciation of the Vietnamese dong against the US dollar.

The department also forecast that rice prices would not increase this month in both global and domestic markets thanks to adequate supplies from Viet Nam and Thailand and high reserves in China and India.

In addition, several huge importers including the Philippines, Indonesia and Bangladesh, had fulfilled their import requirements.

The sugar price was predicted to decline in the domestic market thanks to an output of 1.146 million tonnes of sugar produced, an increase of 200,000 tonnes in comparison with the previous harvest.

Fruit and vegetable prices would remain stable or decline slightly, the report said.

After a dramatic surge in prices in April, cement and steel prices were forecast to remain stable or decline slightly in May, compared with previous months, due to a reduction in demand.

Prices of finished steel products would decline thanks to a levelling off of steel dust prices in the global market and a lower demand in the domestic market caused by the cancellation of construction projects under Government Resolution 11, the department said.

However, soaring prices of input materials would continue to affect other essential commodities in the domestic market. Of this, pharmaceutical product prices would increase due to a 4-7 per cent surge in import costs.

Fresh meat and fish prices would stay high as rising input prices and livestock diseases put the domestic supply under pressure.

Gasoline and fuel prices would soar in the domestic market along with the global market.

The report also said an electricity price adjustment taking effect from the first of June and a pay increase for civil servants from the beginning of this month would contribute to an increase in the consumer price index this month.

In addition, the high demand for consumption and tourism services because of long holidays would contribute to a dramatic increase in prices of transportation, eating out and entertainment. — VNS

Tags: Vietnam 2011 inflation, Vietnam economic, Vietnam economy, Vietnam inflation