As the prices of consumer goods continue to spike, Deputy Minister of Industry and Trade Ho Thi Kim Thoa recently announced that Vietnam may see double-digit inflation this year.
"It is very difficult to keep consumer price index (CPI) through the year in single digits as initially planned. CPI reached 9.58 percent during the first 11 months of this year," Thoa said at a press conference in Hanoi on Tuesday. "[It is] expected to rise by 1.3-1.5 percent in December."
Analysts say that prices will continue to rise due to higher demand during the lunar new year festival (Tet), which will take place in early February.
"Given the current goods reserves, we will see no scarcity of goods," the deputy minister said. "However, the psychological factor have affected the price hike. For example, vegetable prices have increased even though they are not affected by the higher prices of US dollars and gold."
Tran Thi Mieng, deputy head of the Department of Agricultural, Forestry, Fishery and Salt Product Processing under the Ministry of Agriculture and Rural
Development, said the food supply is sufficient to absorb increasing demand during Tet.
However, there is a scarcity of some goods as Chinese traders are gearing up to purchase them from Vietnam in large quantities, Thoa admitted.
Prime Minister Nguyen Tan Dung has asked relevant agencies to maintain the "supply and demand balance" and enforce price control on essential goods such as rice, meat, vegetables, cement, steel, and medicine.
In an instruction issued on Tuesday, Dung also ordered the Ministry of Finance to keep electricity, coal, and fertilizer prices stable while using financial, monetary and tax measures to maintain petrol prices.
He further instructed the ministry to block any unreasonable price increases on registered goods and services.
PM Dung also asked the central bank to stabilize the foreign exchange and gold markets, in addition to interest rates.
The State Bank of Vietnam should cooperate with provincial authorities to investigate and deal with cases of speculation, illegal gold trading and foreign exchange market manipulation, he said.
To curb inflation during the coming holiday season, Hanoi and Ho Chi Minh City have spent VND500 billion (US$23.8 million), and VND380 billion ($18.1 million), respectively, on price stabilization programs.