Dr Tran Hoang Ngan is currently the vice-Ho Chi Minh City Economics University, members of the Financial Advisory national currency. Photo: Hoàng Hà

Talking to VnExpress.net, member National Assembly Economic Committee Tran Hoang Ngan said not to "panic" because the consumer price index (CPI) audio two consecutive months, but it was time to seriously look at and a solution to the problem of purchasing power exhaustion.

- Some experts say Vietnam's economy may fall into a state of deflation, decline. And how his opinion, when GDP increased by only 4.38% 6 months and negative in two in June CPI and 7?

- Economic downturn is a fact is not debatable. Total domestic product (GDP) has increased but 6 months is the lowest in many years.Businesses continue to face difficulties in terms of input and output, production stagnated as the overall global demand and reduced purchasing power in the impoverished country. The government also should see this new situation offers many solutions to support business, in addition to long-term goal is to control inflation.

Movements of the consumer price index is on track according to objectives. Since early last year, we uphold the objective to control inflation, stabilize macro-economy but in August, the CPI has increased by more than 23% over the same period in 2010. The index then started going down and this increased to 5.35% in July over the same period. Inflation this year certainly less than two digits, somewhere around 7-8%.

By month, CPI in June and seven were negative, this has nothing urgent enough to require panic. I was worried that the actual risk of price increases again if no preventive measures early. A careful look at the CPI commodity structure, we can see there are still risks to increase prices of major commodity groups. Food prices over the same period last year has increased, particularly food by 1.95%. This item has more time to the risk of price increases again due to livestock production does not meet the demand, the farmers left the barn a long time because of disease losses, the price dropped.

- So according to what he should have measures to prevent this risk?

- Farmers are currently extremely difficult after a raging epidemic, the purchasing power now that prices fell back exhausted, they have no interest to continue farming. The risk of closing the barn is easily seen, cattle, poultry, fish farms thus severely reduced. Food is indispensable to the people of Vietnam after food, and it accounts for a large proportion in the structure of the CPI.

So, should soon have support mechanisms to farmers. If the rice farmers were government procurement policy for how people are not holes, then purchase a policy for temporary storage, it should also have incentives to farmers. Animal products can also be purchased for temporary storage, by processing frozen and put to use as needed. That is just one solution, the industry needs to do to encourage the farmers to sustain livestock production. Without timely policy, rising food prices and the CPI will rise strongly again in the fourth quarter.

- According to him, CPI will never start up again?

Da reduction will last not much longer, maybe into September will rise again due to latency effects adjusted gas prices, electricity prices, then back to school season so the cost of education will increase. In addition, we also have the will loosen public investment in the last months, increasing credit. As investment increases, aggregate demand increases, more demand for imports will cause exchange rate fluctuations in the direction of reducing the value of Vietnam.

So can recall, the most interesting thing there is negative CPI purchasing power depleted. But that does not mean no risk CPI will rise again if not controlled.

- So the purchasing power exhaustion problem should be viewed in the context of how the prices of some essential commodities have increased and the risk continues to rise?

- Enterprises having both the current input (business expenses, interest rising) and output (total global demand shrank, the domestic purchasing power depleted). Tell that to see that a purchasing power depleted, the business affected first, production will continue stagnating, difficult economic recovery.

It is time for a stimulus package for domestic consumers, which give priority to subjects with low income, poor. The Government has supported solution VAT, personal income tax.But I like not enough, this policy is only meaningful to those with taxable income or is still money to buy goods.

But there are many low-income people not to require taxpayers to enjoy tax exemption policy for personal income, there are many who do not have money to buy goods in order to enjoy VAT reduction policies. They may be heavily subsidized. Should stimulus policies with this object, which can give money directly or buy cards of the events, which occasion.

- Why did you propose to enable the consumer?

- Size of consumer demand as well as indirect support for the enterprise. Many solutions to the Government have made, but it needs the actual latency and immediate measures should be supplemented. Headaches of this business is more inventory, if the consumer stimulus will help companies release inventory, with financing to cover its activities.

This solution requires the coordination of other ministries, to do the right incentives to address and correct low-income people, prevent abuse.

Businesses now have difficulties in materials that mental decline, fighting is running low. They take a long time difficult, piled high interest rates. Along with stimulus measures, additional new measures timely support for business and special expedited processing bank loans. Because if so long, this clot will return to work dread monster effects on the economy. That was why the Governor called on the interest rate of 15% but very few banks fully accept this call.

Health of the business can not expect better days, but many businesses will shut down. So we need empirical research, suggest the active ministry for more dialogue with business to start winning the disease and timely solutions.

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