Monetary policy needs to be implemented in coordination with fiscal policy and other policies to curb inflation, ensure macroeconomic stability and maintain economic balance, according to Deputy Prime Minister Le Minh Khai.

The Deputy PM was speaking at the meeting of the National Steering Committee for Price Management on Thursday.

He said domestic prices were kept on the right track in the first nine and a half months of 2022 thanks to the efforts of ministries and local authorities. However, the situation would remain tough over the rest of the year due to unfavourable factors.

He called on ministries and local authorities to keep a close watch on the world's economic situation and stay well-informed about the policy response of other countries, especially Viet Nam's major trade partners, to better manage domestic prices.

He also urged ministries and local authorities to closely monitor the supply-demand of goods on local markets and react accordingly to ensure price stability and prevent shortages of goods.

For goods under State management, the price adjustment is left to the discretion of ministries and local authorities, who will adjust the prices when necessary. Inspection will be stepped up to keep price-related violations at bay.

Lastly, he called for transparency in price management and price disclosure to better peg inflation expectations among consumers and firms.

According to the Ministry of Finance, higher exports and consumption demand led by the across-the-board economic recovery, coupled with a global inflationary pressure, have pushed up the prices of basic necessities. However, domestic prices are still under control.

The consumer price index (CPI) in September increased by just 0.4 per cent against August, 4.0 per cent against December 2021 and 3.9 per cent year-on-year. Average nine-month CPI was 2.7 per cent higher than the same period last year.

In projection, the ministry was concerned that fuel prices would continue to fluctuate unpredictably in the short-term. The prices of foods, beverages, and clothing would rise towards year end as seasonably, and pork prices would follow suit if tight supply happens.

Higher delivery of public investment in late-year months would fuel the situation by raising the demand for construction materials.

On such economic grounds, the ministry estimated average CPI growth for 2022 at between 3.27 and 3.51 per cent. General Statistics Office forecast a similar band, between 3.2 and 3.5 per cent, whereas the State Bank of Vietnam suggested 3.4 plus or minus 0.2 per cent.

The ministry called for a proactive and flexible approach to price management to keep inflation on target this year and lay the groundwork for price control in 2023. — VNS