Consumer prices to jump more this year than 2015

Tuesday, Jan 19, 2016 08:31

CPI could increase between 3 per cent and 5 per cent this year. — File Photo
HA NOI (Biz Hub) — The consumer price index (CPI) this year would rise more than in 2015 due to a number of factors, statistics official have forecast.

Deputy Director of the Pricing Statistics Department under the General Statistics Office, Do Thi Ngoc said some factors affected inflation this year including an increase in tuition fees, healthcare services and minimum wages.

Besides, Ngoc said, power supply is also set to improve this year as the rise in early 2015 was only 7.5 per cent, the lowest level in a plan suggested by the Ministry of Industry and Trade.

She said that the exchange rate would also have an impact on inflation this year. The rate could be also adjusted upwards next time in wake of a rise in the United States (US) dollar as well as an increase in lending demands.

However, Ngoc said, there would be some other factors that could restrain the CPI rise this year.

The oil price in the global market is forecast to continue its decline this year due to a high supply source while the price of agricultural produce is also likely to reduce in wake of fiercer competition.

In the latest macro report released last week, Bao Viet Securities Company (BVSC) also forecast that inflation could accelerate this year due to a number of factors.

These include the possibility of global commodity prices bottoming out, adverse effects of the El Nino phenomenon, the delay in the State Bank of Viet Nam (SBV)'s expansive monetary policy, and the higher consumer demand, the brokerage agency warned.

The BVSC forecast that the CPI would increase between 3 per cent and 5 per cent this year, compared to 0.6 per cent last year.

The brokerage agency expected inflation to be revised gradually to between 5 per cent and 7 per cent for the 2016 to 2020 period and the SBV would maintain a gap between interest rates in the dong and the greenback to ease upward pressure on the dong.

According to the BVSC, the dong could weaken by 3 per cent to 4 per cent against the US dollar in 2016, based on presumptions that Viet Nam's overall balance of payments would post a surplus of US$5 billion, the US Fed could lift the interest rate by 1 per cent and the Chinese yuan could continue to be devalued.

Interest rates on dong-denominated deposits are expected to rise 0.6 to 1 percentage point this year, driven by rapid credit growth in 2015.

The BIDV Securities Company this month also forecast that consumer prices could increase between 1.8 per cent and 3.5 per cent this year. — VNS

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