Curbing inflation was a complex that exacted a price, said Prime Minister Nguyen Tan Dung.

In an article published on the Vietnamese Government website, the Prime Minister analysed the reasons for current inflation and elaborated on the Government’s measures to curb inflation and maintain economic growth.

To control inflation would require concerted efforts by Government management agencies and authorities at all levels, he said.

In a recent meeting, the Government defined key tasks in curbing inflation, maintaining macro-economic development, and ensuring social welfare and sustainable growth.

To achieve the targets, the Government proposed 7 measures:

First, the Government would further tighten monetary policy. The constant increase of the money supply in circulation and outstanding loans dating from 2004 were major reasons for high inflation.

The Government began to closely control payment and loans earlier this year. Tightened monetary policy, however, should ensure the economy’s liquidity and the operation of banks and credit institutions. It should also create institutions. It should also create conditions for domestic production and export activity.

Second, the Government would cut down on expenses and public investments relying on the State Budget, and it would strictly control investment items of State-owned enterprises so as to reduce the deficit and contribute to the economy’s development. Ministries and chairmen of provincial People’s Committees were asked to strictly monitor investment items of State-owned enterprises and terminate ineffective construction works.

Third, development of agriculture and industry would take priority so as to overcome consequences resulting from inclement weather and epidemics and to increase food productivity. Production development was key to increasing the supply available for in-country use and export, curbing inflation and decreasing the trade deficit without side effects.

Fourth, supply and demand of goods must be ensured to promote exports and reduce the trade deficit. Balancing the supply and demand of goods, especially essential goods for production and living, was necessary to prevent sudden price changes and speculation.

The stabilise domestic production, the Government would not increase fuel and petrol prices before June this year and would reduce some fees for farmers.

To ensure food security, the Government decided that the total rice export volume would be 4 million tonnes this year.

The Government applied a flexible exchange rate with an appropriate band which should help curb inflation without impacting exports. Additionally, the Government asked that exports increase and imports decrease to balance trade.

Fifth, thrift in production and consumption was encouraged. Government and State offices were called to cut 10 percent. Businesses must re-check expenses to reduce prices and people were encouraged to save fuel and energy in their day-to-day living.

Sixth, market management should be further supervised to avoid goods speculation, especially in regards to essential items such as petrol, cement, steel, medicines and foods. Cross-border smuggling should be immediately stopped.

Finally, to help people, especially the poor, survive a price hike, the Government would implement social welfare policies and increase salary and allowances.-Enditem
Source: VNA