Finance watchdog urges price control

The committee advocated forming a "price stabilisation package" that would include roadmaps for adjusting the prices of petrol, electricity and public services. Such a scheme would prevent price adjustments from occurring in the same month, which might push up the consumer price index (CPI).

According to the committee's calculations, if the local currency (VND) devalued 3 percent against the US dollar, CPI would increase by 0.3-0.4 percent. If electricity prices increased by 10 percent, CPI would climb 0.4 percent. And if the petrol price rose 5 percent, CPI would climb 0.1-0.15 percent. If all three prices were adjusted at the same time, however, CPI might rise by 0.8-1 percent.

The Government's target of keeping this year's CPI below the 2012 rate is feasible, according to the committee, if both the money supply and aggregate demand remain under control.

Additionally, the committee recommended that any policies intended to resolve bad debts and rescue the real estate market should take into account the amount of money pumped into circulation and the pressure of inflation in order to limit their impact on the inflation control target and create a stable macro-economic environment in the medium and long term.

Regarding exchange rate-related policies, the committee said that adjusting the exchange rate was not urgent, as exports have seen positive growth. Therefore, the committee recommended that exchange rate policies prioritise curbing inflation and stabilising the macro-economy.