Monitoring price fluctuations to develop appropriate response strategies
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The Government Office has just issued Notice No. 193/TB-VPCP, which concludes the meeting of the Steering Committee on Price Management and Operation, chaired by Deputy Prime Minister Le Minh Khai. The meeting focused on the results of price management and operation in the first quarter of 2024 and set the direction for price regulation for the remaining months of the year.
Market prices have shown an upward trend in the first months of the year
According to the Ministry of Finance’s report, price management and operation in the first quarter of 2024 continued to face various pressures due to rapid and complex changes in the global and regional contexts. The ongoing military conflicts and strategic competition among major countries have further complicated risks related to energy security, food security, inflation, and disruptions to global supply chains. Furthermore, the prices of gasoline, oil, and raw materials for production have fluctuated unpredictably. Domestically, market prices have increased in the first months of the year due to increased demand around the Lunar New Year, which is a trend observed in previous years. According to data from the General Statistics Office, CPI in the first quarter of 2024 rose by 3.77%, while core inflation increased by 2.81%. These figures are within the allowable limits, but there is a need for continued monitoring as the prices of many commodities have shown an upward trend, putting pressure on inflation and price management and operation.
From the beginning of the year, to ensure the goals of macroeconomic stability, growth promotion, inflation control, and maintenance of major economic balances set by the National Assembly, the Government, the Prime Minister, and the Steering Committee on Price Management and Operation have directed local ministries, departments, and sectors to resolutely implement tasks and solutions to ensure smooth supply, circulation, and distribution of goods and services, particularly for strategic commodities. The focus has been on enhancing price management and operation during holidays and New Year celebrations. There has also been active planning and formulation of price management strategies for commodities with government-set prices and public services based on market mechanisms. Monetary policy has been managed proactively, flexibly, timely, and effectively, with close coordination and harmony with fiscal policy and other macroeconomic policies. The government has continued to implement policies of tax exemption and reduction, as well as fee and charge waivers, to support people and businesses. The supply and demand situation and market prices, especially for essential goods, are being closely monitored to proactively develop appropriate and timely solutions and measures that meet the practical requirements of price management and operation.
It is predicted that in the coming period, price management and operation will continue to face significant pressure due to the rapid and complex changes in the global and regional situations, which are difficult to predict. Military conflicts show no signs of cooling and have intensified in certain regions, impacting the prices of energy, raw materials, and shipping costs. Business operations continue to face challenges, exchange rates are rising, and inflationary pressures are increasing, putting more pressure on price management and operation in the second quarter and the remaining months of 2024.
Developing overall price management scenarios linked to flexible and appropriate pricing strategies and adjustment roadmaps
To proactively respond to the challenges in price management and operation in the second quarter and the remaining months of 2024, Deputy Prime Minister Le Minh Khai has requested that ministries, departments, and local government agencies enhance implementation of the tasks and solutions set out in the government’s resolutions, Directive No. 12/CT-TTg dated April 21, 2024, and other guidance documents issued by the Prime Minister and Notice No. 36/TB-VPCP dated January 31, 2024, from the Head of the Steering Committee on Price Management and Operation.
In particular, ministries, departments, and local governments will focus on monitoring and following the domestic and international situations, closely overseeing price fluctuations of commodities both globally and domestically, and promptly issuing warnings about potential risks that could impact domestic price levels. They will proactively take action within their authority or propose and provide advice to competent authorities on appropriate, flexible, and timely measures, solutions, and response scenarios to ensure that the inflation control target for 2024 remains within the 4-4.5% limit set by the National Assembly under all circumstances.
The Ministry of Finance, as the standing agency of the Steering Committee, will take the lead in coordinating with relevant ministries and agencies to closely monitor the situation, proactively forecast, calculate, and update inflation scenarios. Based on this information, it will develop overall price management scenarios linked to appropriate, flexible, and timely pricing strategies and adjustment roadmaps for commodities and services to ensure that inflation control targets are met within the set limits.
The ministries of Industry and Trade, Health, and Education and Training, and other ministries and agencies, according to their assigned functions and tasks, must closely monitor the situation to develop and update price management strategies and scenarios for specific commodities under their management. They will strengthen cooperation with the Ministry of Finance, the General Statistics Office, and other relevant ministries and agencies to analyze, forecast, and assess the impacts and price fluctuations of commodities under their management on the overall price level. This will ensure that overall price management scenarios and specific price management strategies and scenarios for commodities under their management are updated, ensuring effectiveness, coherence, unity, and achievement of the set inflation control targets.
Strict handling of violations of price laws
Based on the overall and specific management scenarios, ministries, agencies, and localities will monitor supply and demand and market prices in accordance with their assigned functions and tasks. They will proactively develop and implement appropriate and timely management measures and solutions within their authority and flexibly and effectively manage price regulation tools and measures in accordance with price laws to control and stabilize the market as per the set scenarios. They will proactively forecast and prepare plans to ensure a balance between supply and demand and regulate production activities, as well as supply, circulation, and distribution, to prevent shortages, supply disruptions, and sharp price increases, especially for essential goods and services and commodities with high weight in the consumer price index. Timely reports will be made directly or in coordination with the Ministry of Finance and the Standing Agency of the Steering Committee to keep the Government, the Prime Minister, and the Head of the Steering Committee on Price Management and Operation informed in order to ensure timely information for price management.
At the same time, ministries, departments, and localities will continue to implement the roadmap for adjusting prices of public services in accordance with market mechanisms and for government-managed commodities based on market principles. They will proactively calculate and prepare pricing strategies and adjustment roadmaps for commodities to promptly make adjustments within their authority or report to competent authorities for consideration and decision on the extent and timing of adjustments, in line with market price trends and levels, and to ensure that the inflation control target is met. Effective implementation and supervision of price declaration and listing measures, as well as public disclosure of price information, will be strengthened. Inspections and examinations of compliance with price laws will be conducted, and violations of such laws will be strictly handled.
In addition, proactive, flexible, and timely implementation of monetary policy is essential, along with close coordination and harmony with fiscal policy and other macroeconomic policies. Credit, interest rates, and exchange rates will be managed in a synchronized, harmonious, flexible, and effective manner in line with overall objectives, creating favorable conditions for businesses and people to stabilize their production and business activities, contributing to inflation control, macroeconomic stability, and stability in the monetary and foreign exchange markets, as well as control of core inflation, which will provide the foundation for overall inflation control. Research and consideration will be given to issuing or submitting to competent authorities for issuance of policies on tax exemption, reduction, and extension, as well as land use fees, to address production and business difficulties and promote growth.
The Ministry of Finance and other ministries and agencies, according to their assigned functions and tasks, will urgently complete the legal documents guiding the Price Law and promptly report to competent authorities for issuance or issue them within their authority to ensure synchronous, effective, and efficient implementation and prevent legal loopholes when the law takes effect on July 1, 2024.
Effective and timely implementation of measures, tools, and solutions for gold market management
The State Bank of Vietnam will strictly implement the instructions of the Government and government leaders in related dispatches, directives, and documents. It will proactively and effectively implement measures, tools, and solutions for gold market management within its authority and in accordance with legal regulations. It will continue to study, review, and assess the impacts and summarize the implementation of Decree No. 24/2012/ND-CP in order to propose appropriate amendments and supplements to ensure alignment with the practical situation and with economic developments domestically, regionally, and internationally, and to enhance the role of the State in gold market management and regulation in accordance with regulations, ensuring economic security, financial security, national currency, and social order and safety.
Efforts will be made to strengthen information and communication work, ensuring objective, timely, public, and transparent information on prices and the price management of the Government and the Steering Committee on Price Management and Operation, particularly
