He also asked them to regularly provide updated information to the mass media in a bid to inform the public about the developments of consumer price indexes.

Dung said that over the past seven months the Government had kept the rate of inflation below that of national economic growth, as targeted by the National Assembly.

According to Government reports, the consumer price index surged 6.19% in the first seven months of this year, while the gross domestic product climbed approximately 8%.

Still the consumer price index rose faster than the same period last year, when it only increased by 4.4%.

The Ministry of Finance attributed the consumer price index hike to price increases in the world market; natural disasters; animal epidemics; and price adjustments in major production materials such as electricity, petroleum and coal, as well as an influx of foreign investment that brought in a high volume of foreign currencies.

To address the problem and keep the price index hike below the targeted economic growth rate of 8.5% for the year, Dung has issued several urgent measures.

He entrusted the Ministry of Finance and other relevant ministries and agencies to set up missions to check production and trading establishments to determine reasons for the price increases of essential commodities and services while tightening the control of expenditures and promoting thrift.

In addition, he mandated a reduction in import-export taxes on commodities that have high price indexes, stressing the need to keep balance in the supply and demand of commodities and services.

Drastic measures

The Government proposed a set of measures to curb inflation and stabilise prices.

To maintain the macro-economic balance, production and trading activities should be promoted to ensure balances of goods, money, payment and budget revenues and expenditure.

Capital for major projects should be re-examined and shifted from suspended projects to those that are more effective. Mechanical and policy impediments need to be addressed immediately to drive ahead the progress of investment capital imbursement from the State budget, bonds, credits and Official Development Assistance (ODA).

Ministries, sectors, local government, professional associations and businesses were asked to introduce measures for market expansion, export promotion, trade balance improvement, trade surplus reduction, food security maintenance and rice price stabilisation.

In terms of monetary and financial policy, the State Bank must keep the total payment instruments in check so as to control price hikes but not affect the 8.5% economic growth rate target for the year.

Money will be mobilised through selling State Bank, Government and Treasury bonds. Foods and some major consumption goods will have their import taxes reduced. Exchange and interest rates in Vietnamese dong will be maintained.

Measures to regulate supply and demand in the securities market will be enhanced with an aim to create favourable conditions for the market to develop sustainably.

The Ministry of Finance should work with relevant ministries, groups and corporations and introduce measures to regulate prices of major materials and goods such as electricity, coal for cement fertiliser and paper production, transportation clean water and postal services.

State budget transactions should be put under strict controls so as not to exceed five per cent of budget allocated. Anti-corruption and anti-waste measures should be developed.

In terms of market controls, changes in domestic and international market prices should be closely monitored. Commodities and service supply and demand should be regularly assessed.

Working teams will be established to investigate and control price hikes of major items such as steel and gas. Acts of speculation to increase prices will be strictly handled.

According to the plan, activities of market management, trade fraud prevention and goods quality control will be enhanced, while manufacturing and processing institutions violating food hygiene and safety criteria will be strictly punished.