The 12.3 percent increase in the minimum wage for public servants and employees at state-owned enterprises this month will not affect efforts to control inflation, a government official said.
The wage boost has been planned carefully with earmarked funds and the government will not print more money, Deputy Finance Minister Tran Van Hieu said at a press briefing in Hanoi Wednesday.
Money supply in the society will not change and consumer prices cannot be raised, Hieu said.
Starting May 1, the minimum wage has been raised to VND730,000 (US$38.5) a month from VND650,000. Since the announcement of the increase in March experts have raised concerns that the higher salaries can lead to high inflation.
Hieu said the government will take strong measures to prevent unreasonable price hikes on the excuse of higher salaries.
Inflation eased last month with consumer prices rising only 0.14 percent over April last year. Prices increased 4.27 percent compared to last December, according to the General Statistics Office in Hanoi.
Hieu said it's unlikely that inflation can rise sharply this month. The government has kept calm in dealing with inflation and is strongly determined to achieve the target of keeping full-year inflation at 7 percent.
Speaking at the press briefing, Nguyen Dong Tien, deputy governor of the State Bank of Vietnam, said the government has ordered local lenders to cut operation costs and lower interest rates to provide better credit access to their customers.
Lending interest rates are now around 14 percent a year and deposit rates around 11 percent, Tien said.
He said money supply rose 5.8 percent in the first four months and credit growth during the period was 5.5 percent, on par with full-year targets set by the government.