Vietnam’s consumer price index (CPI), the main gauge of inflation, is forecast to stay below the 4% target in 2021 as the global and local economies continue to recover from the Covid-19 crisis.

Customers at Big C super market. Photo: Thu Huong.

“In 2020, the Government’s timely support helped ensure a positive economic growth at 2.91% year-on-year,” said Director of the Academic of Finance Nguyen Trong Co at a conference jointly held by the Ministry of Finance's Price Management Department and the Academy of Finance on January 5.

The average CPI in 2020 expanded by 3.23% year-on-year, significantly lower than the 4%-target set by the National Assembly, while inflation grew by 2.31%.

“Despite major challenges from Covid-19, African Swine Fever and natural disaster, 2020 continued to be a successful year for the Government with both positive economic growth and inflation under control,” Economist Ngo Tri Long said.

Mr. Long attributed the finance ministry’s efforts in setting up short- and long-term scenarios for price management in 2020, as well as the effective cooperation between various agencies in stabilizing market prices, to the Government’s success in keeping a low inflation.

In 2021, Mr. Long said the existing uncertainties will require a cautious and flexible approach in price management.

“Fiscal and monetary policies are instrumental to contain the inflation and continue supporting people and businesses affected by the pandemic,” stated Mr. Long.

Director of the Institute of Economics-Finance (IEF) Nguyen Ba Minh expected prices of input materials in international markets to increase once the pandemic is fully contained.

“The complicated situation of the pandemic and natural disasters will continue to impact production and the balance of supply-demand in the local market,” he added.

IEF’s Vice Director Nguyen Duc Do said Covid-19 vaccines and the recovery of global and domestic economies are factors that will lead to an increase in inflation.

“However, given the CPI expansion of a modest level of 0.19% in last December and the economy, which is expected to be on track of recovery in 2021, the inflation would not be high,” stated Mr. Do.

According to Mr. Do, in case of strong volatility of petroleum and food prices similar to that of 2019, the inflation would continue to stay below 3%.