Lite administrative procedures remove burdens for enterprises. In this photo: A representative of enterprises is working on customs procedure in Binh Duong Province
The Head of the Pricing Department under the General Statistics Office (GSO), Nguyen Duc Thang, says that over the past six months, the low purchasing power and large inventories, coupled with adjusted petrol prices and pay rises have had little impact on the consumer price index (CPI).
Why inflation naturally goes down
Economic experts put the falling inflation rate in the reviewed period down to difficulties in the national economy that resulted in lower inflation and market prices.
The Head of the Scientific Research Institution under the Ministry of Finance, Ngo Tri Long, says the trend of deflation is unsteady, adding that the continuing economic downturn and above-mentioned factors will greatly affect market prices in the remaining months of this year.
There is concern about the risk of deflation in the second half as the country’s CPI in June was at a rock-bottom level of minus 0.26 percent compared to a month earlier.
According to Vu Vinh Phu, Chairman of the Hanoi Supermarket Association, 80 percent of consumers are going to supermarkets to buy food and retail sales have dropped by 10-20 percent.
Phu says aggregate demand fell sharply in the first half of 2012 and is likely to drop further into next year.
To stimulate the public purchasing power, Phu argues, the State needs to lower the current corporate income tax rate from 25 percent to 15-18 percent for the next three to five years.
Retail consumers at supermarkets and shops across the country should also be exempt from paying 5 to 10 percent of value added tax (VAT).
To help farmers and fishermen make a profit of 20-30 percent, it is essential to set up an effective retail and wholesale distribution network to cut out unnecessary middlemen, Phu says.
The Deputy Head of the Domestic Market Department under the Ministry of Industry and Trade, Nguyen Loc An, says the production of domestic consumer goods will remain stable as there are minor fluctuations in the prices of consumer goods on the global market.
However, the recurrence of blue-ear pig disease and other difficulties in farming may lead to a shortfall in supply of foodstuffs in the remaining months of this year, but thanks to stable interest and exchange rates the prices of some essential goods are expected to increase slightly.
It is estimated that the number of domestic businesses who face bankruptcy or have to suspend operation will increase because they cannot afford high-interest loans to pay rising costs of production and taxes.
In the meantime, the prices of some essential goods such as electricity, milk, baby food and household water in major urban areas are predicted to go up in the near future.
Judging by such estimation Thang emphasizes the need to boost production, maximize the purchasing power, stabilize the macroeconomy and lower lending interest rates in tandem with the falling CPI rate.
Most economic experts are optimistic about a brighter economic picture in the second half of this year, saying that with positive developments in the macroeconomy, the purchasing power will be back on track.
Sharing this view, Phu gives a positive assessment of the banks’ liquidity, increased outstanding debts and stable exchange rates. However, he says the State should ensure adequate funding and steady credit growth to prevent a resurgence of inflation.
VOV
Deflation likely to continue in second half
The falling inflation index in the first half of this year is attributed to unanticipated factors and the lack of middle and long-term strategies for stable economic growth.
Lite administrative procedures remove burdens for enterprises. In this photo: A representative of enterprises is working on customs procedure in Binh Duong Province
The Head of the Pricing Department under the General Statistics Office (GSO), Nguyen Duc Thang, says that over the past six months, the low purchasing power and large inventories, coupled with adjusted petrol prices and pay rises have had little impact on the consumer price index (CPI).
Why inflation naturally goes down
Economic experts put the falling inflation rate in the reviewed period down to difficulties in the national economy that resulted in lower inflation and market prices.
The Head of the Scientific Research Institution under the Ministry of Finance, Ngo Tri Long, says the trend of deflation is unsteady, adding that the continuing economic downturn and above-mentioned factors will greatly affect market prices in the remaining months of this year.
There is concern about the risk of deflation in the second half as the country’s CPI in June was at a rock-bottom level of minus 0.26 percent compared to a month earlier.
According to Vu Vinh Phu, Chairman of the Hanoi Supermarket Association, 80 percent of consumers are going to supermarkets to buy food and retail sales have dropped by 10-20 percent.
Phu says aggregate demand fell sharply in the first half of 2012 and is likely to drop further into next year.
To stimulate the public purchasing power, Phu argues, the State needs to lower the current corporate income tax rate from 25 percent to 15-18 percent for the next three to five years.
Retail consumers at supermarkets and shops across the country should also be exempt from paying 5 to 10 percent of value added tax (VAT).
To help farmers and fishermen make a profit of 20-30 percent, it is essential to set up an effective retail and wholesale distribution network to cut out unnecessary middlemen, Phu says.
The Deputy Head of the Domestic Market Department under the Ministry of Industry and Trade, Nguyen Loc An, says the production of domestic consumer goods will remain stable as there are minor fluctuations in the prices of consumer goods on the global market.
However, the recurrence of blue-ear pig disease and other difficulties in farming may lead to a shortfall in supply of foodstuffs in the remaining months of this year, but thanks to stable interest and exchange rates the prices of some essential goods are expected to increase slightly.
It is estimated that the number of domestic businesses who face bankruptcy or have to suspend operation will increase because they cannot afford high-interest loans to pay rising costs of production and taxes.
In the meantime, the prices of some essential goods such as electricity, milk, baby food and household water in major urban areas are predicted to go up in the near future.
Judging by such estimation Thang emphasizes the need to boost production, maximize the purchasing power, stabilize the macroeconomy and lower lending interest rates in tandem with the falling CPI rate.
Most economic experts are optimistic about a brighter economic picture in the second half of this year, saying that with positive developments in the macroeconomy, the purchasing power will be back on track.
Sharing this view, Phu gives a positive assessment of the banks’ liquidity, increased outstanding debts and stable exchange rates. However, he says the State should ensure adequate funding and steady credit growth to prevent a resurgence of inflation.
VOV
Lite administrative procedures remove burdens for enterprises. In this photo: A representative of enterprises is working on customs procedure in Binh Duong Province
The Head of the Pricing Department under the General Statistics Office (GSO), Nguyen Duc Thang, says that over the past six months, the low purchasing power and large inventories, coupled with adjusted petrol prices and pay rises have had little impact on the consumer price index (CPI).
Why inflation naturally goes down
Economic experts put the falling inflation rate in the reviewed period down to difficulties in the national economy that resulted in lower inflation and market prices.
The Head of the Scientific Research Institution under the Ministry of Finance, Ngo Tri Long, says the trend of deflation is unsteady, adding that the continuing economic downturn and above-mentioned factors will greatly affect market prices in the remaining months of this year.
There is concern about the risk of deflation in the second half as the country’s CPI in June was at a rock-bottom level of minus 0.26 percent compared to a month earlier.
According to Vu Vinh Phu, Chairman of the Hanoi Supermarket Association, 80 percent of consumers are going to supermarkets to buy food and retail sales have dropped by 10-20 percent.
Phu says aggregate demand fell sharply in the first half of 2012 and is likely to drop further into next year.
To stimulate the public purchasing power, Phu argues, the State needs to lower the current corporate income tax rate from 25 percent to 15-18 percent for the next three to five years.
Retail consumers at supermarkets and shops across the country should also be exempt from paying 5 to 10 percent of value added tax (VAT).
To help farmers and fishermen make a profit of 20-30 percent, it is essential to set up an effective retail and wholesale distribution network to cut out unnecessary middlemen, Phu says.
The Deputy Head of the Domestic Market Department under the Ministry of Industry and Trade, Nguyen Loc An, says the production of domestic consumer goods will remain stable as there are minor fluctuations in the prices of consumer goods on the global market.
However, the recurrence of blue-ear pig disease and other difficulties in farming may lead to a shortfall in supply of foodstuffs in the remaining months of this year, but thanks to stable interest and exchange rates the prices of some essential goods are expected to increase slightly.
It is estimated that the number of domestic businesses who face bankruptcy or have to suspend operation will increase because they cannot afford high-interest loans to pay rising costs of production and taxes.
In the meantime, the prices of some essential goods such as electricity, milk, baby food and household water in major urban areas are predicted to go up in the near future.
Judging by such estimation Thang emphasizes the need to boost production, maximize the purchasing power, stabilize the macroeconomy and lower lending interest rates in tandem with the falling CPI rate.
Most economic experts are optimistic about a brighter economic picture in the second half of this year, saying that with positive developments in the macroeconomy, the purchasing power will be back on track.
Sharing this view, Phu gives a positive assessment of the banks’ liquidity, increased outstanding debts and stable exchange rates. However, he says the State should ensure adequate funding and steady credit growth to prevent a resurgence of inflation.
VOV
