This will have an unfavourable impact on socio-economic development but not change its course of evolution, they said.
In November, the CPI saw a month-on-month record increase of 1.23%, bringing the CPI over the past 11 months to 9.45%.
It is likely to rise 1.5% in December to reach 10.95% by the end of the year.
One of the reasons behind the increasing CPI was the surging import rate in the country’s GDP, Deputy Finance Minister Tran Van Ta said.
He pointed to major manufacturing sectors’ large dependence on imported raw materials as the factor has raised the production cost and then the commodities and services prices in the country.
Another factor to drive up the prices was that the Government has loosened its control over the prices of many commodities due to its commitments to the World Trade Organisation (WTO), Ta added.
“The petroleum price has been adjusted in line with the fluctuations on the world market, causing a domino effect on price rises in other products and services,” he cited.
In addition to these reasons, Ta also mentioned natural disaster and diseases as other additional factors.
Natural disasters and a poultry flu outbreak had caused a reduction in the supply and pushed up the prices. The prices of food and services were leading the ten groups of commodities seeing surging price, he noted.
Although the Finance Ministry has taken simultaneous measures to contain the price hike right after the first quarter, it failed in forecasting and calculating the effect world price fluctuations would have on the local market, which led to the absence of overall and effective solutions.
“We must accept the influence of the world market prices when adopting the market mechanism,” said Prime Minister Nguyen Tan Dung at the Government’s regular meeting in November.
He also added that the price hike would not affect the country’s economic growth because it was excluded from the process of calculation.
Sharing the view with the Prime Minister, Deputy Minister of Finance Tran Van Ta pointed to the fact that the per capita income is estimated to have increased by 5.8%.
However, relevant agencies are still asked to continue taking measures to curb the increase of prices in order to stabilise the local market during the year-end.
PM Dung affirmed that the Government’s price policies must conform to the market economy’s regulations and integration commitments but not create loopholes for speculation and unwanted price hikes.
To limit the negative impact of inflation on the working and poor, the Government pledged no big fluctuation in prices of essential goods, he said, adding that policies that give assistance to the people in need will be carried out instead of subsidies for enterprises.