Vietnam Urges Flexible Price Controls Amid Rising Inflationary Pressures

HANOI – Deputy Prime Minister Nguyễn Văn Thắng has called for the implementation of flexible price management scenarios and a careful assessment of inflationary impacts, aiming to keep inflation under control while sustaining economic growth. He made the remarks while chairing a meeting of the Price Management Steering Committee in Hà Nội on June 26, which reviewed price management in the first half of 2026 and outlined measures for the rest of the year.

Three inflation scenarios updated

Inflation remains under control, but pressure on the full-year target persists, according to a report delivered at the meeting by Deputy Minister of Finance Trần Quốc Phương.

The consumer price index (CPI) increased between 0.84% and 1.23% month-on-month during February, March, and April, a rise attributed to seasonal factors and higher global prices for fuel, gas, and construction materials. The index subsequently eased towards the end of the second quarter, aided by abundant domestic food supplies.

Phương noted that domestic prices will face a combination of internal and external pressures in the second half of 2026. However, these are expected to be moderated by several factors, including continued tax and fee reductions, a flexible monetary policy, stable food supplies, and the government's overarching commitment to macroeconomic stability.

Reflecting these conditions, the Ministry of Finance has updated three inflation scenarios for 2026, projecting average inflation at approximately 4.5%, 5%, or 5.5%. For its part, the State Bank of Vietnam forecasts average inflation in a range of 4.8% to 5.5%, while international organisations have provided estimates between 3.8% and 5.2%.

Careful assessment of CPI impacts

In his address, Deputy Prime Minister Thắng said that domestic supply and demand were broadly balanced in the first half of the year, with sufficient supplies of essential goods. He identified several inflationary risks, including the conflict in the Middle East, which has elevated prices for energy, transport, and input materials, alongside pressures from the exchange rate and strengthening domestic consumption and investment.

Thắng attributed the successful inflation control in the first half to the government's decisive leadership and close coordination between fiscal and monetary policies. He also cited measures to ensure adequate supplies, stabilise markets, reduce fees on fuel, and strengthen actions against price manipulation and speculation. These efforts, he said, have prevented widespread shortages and price surges, thereby helping to maintain macroeconomic stability and support growth.

Despite inflation remaining within the annual target, Thắng stressed that limited policy room necessitates continued vigilance.

He instructed ministries and localities to enhance their forecasting capabilities by closely monitoring global economic developments, the monetary policies of major central banks, energy and food prices, exchange rates, and geopolitical events that could disrupt supply chains.

On fiscal policy, Thắng called for prudent management, strict control of recurrent spending, and the prioritisation of development investment and social welfare. He also urged for an accelerated but well-paced disbursement of public investment to prevent pressure on construction material prices and labour costs towards the year's end.

Monetary policy, he directed, should remain proactive and flexible, closely coordinated with fiscal policy. Authorities must carefully manage core inflation, money supply, credit growth, exchange rates, and interest rates to curb imported inflation and stabilise market expectations.

Regarding state-managed prices, particularly in healthcare and education, Thắng instructed authorities to carefully review planned adjustments, determining which increases are essential and which can be postponed. Any proposed adjustment must be thoroughly assessed for its impact on the CPI before being submitted for approval.

He also underscored the importance of transparent communication on price management policies to stabilise market sentiment, anchor inflation expectations, and deter speculative activities.

Finally, the Deputy Prime Minister urged ministries and agencies to promptly implement the 2023 Law on Price and the 2025 Law Amending a Number of Articles of the Law on Price. He called for a review of outdated legal documents to ensure a coherent legal framework. He also instructed authorities to develop an online price declaration system by July 1, 2027, under Government Decree No. 85/2024/NĐ-CP, ensuring data integration into the national price database and the prompt issuance of lists of businesses required to declare prices.