Low inflation to boost local enterprises with reduced costs: Finance Minister
Sunday, December 14, 2014, 12:30 GMT+7
Low inflation, which is expected to be around 4 percent this year, will be a chance for local business to soar up their operations, said Finance Minister Dinh Tien Dung in a recent TV program aired by Vietnam Television.
Answering the question whether there is any concern over the inflation rate in 2014, which is expected to hit a 10-year low at around 4 percent, Minister Dung said he think the low inflation rate is a good sign as it will give a boost to local businesses as they will increase production due to reduced input costs, thus improving their competitive edges.
Regarding what lessons can be drawn through the control of inflation in 2014, Dung said it is obvious that stabilized macroeconomic situation, the flexibility and harmony in fiscal and monetary policies, and maintaining the balance between supply and demand of goods to avoid price spike has helped stabilize the prices on the market during this year.
“We must also strengthen the management of markets, prices, strengthening anti-smuggling, trade fraud,” he added.
Regarding the question why tax collection in the first 11 months of 2014 exceeded whole year’s tax collection plan given the difficulties in business situation locally, the minister said at a time like this, the Ministry of Finance is often busy balancing revenues to offset spending, but the situation is getting better this year.
The economic situation so far this year has many good signs with economic growth reaching 5.8 percent, macroeconomic stabilized and inflation controlled. Meanwhile, rising exports help increase tax revenue.
In addition, the entire financial sector has implemented drastic measures to raise tax revenue by increasing tax debt collection and reduce losses against transfer pricing.
Regarding the loss of tax revenue due to the fall of world oil price, which lost 30 percent in value in the last 6 months, while the state budget is expected to lose VND1 trillion if the world oil price goes down by every $1, Minister Dung said in the past two months, the Ministry of Finance has constantly monitored and updated the situation in world and local oil prices.
However, the drop in oil prices will help reduce the input costs of production for businesses, improving competitiveness, he added.
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On Friday, crude-oil futures fell to their lowest since May 2009 briefly dropping below $57 a barrel, after the International Energy Agency delivered the latest reduction in forecasts for global oil demand, according to newswire Marketwatch. Oil changed hands for as little as $57.34 a barrel, and the settlement was the lowest since May 15, 2009. January Brent crude on London’s ICE Futures exchange fell $1.83, or 2.9 percent, to end at $61.85 a barrel on Friday. On the week, Brent lost 10 percent. Friday’s settlement was the lowest since July 14, 2009. Crude losses deepened after the IEA cut its 2015 global oil-demand view by 230,000 barrels a day to about 900,000 barrels a day, Marketwatch reported. |
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