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Inflation remains a clear feature of the economy’s outlook for the second quarter, but with flexible policy response scenarios from the Government, there is a credible basis to expect a cooling path for prices in the near term.
Speaking at the Government’s regular April 2026 meeting, Finance Minister Ngo Van Tuan said the consumer price index (CPI) in April rose 5.46% year-on-year, exceeding March’s 4.65% due to cost-push factors. A surge in fuel prices has created knock-on effects, driving price increases in transport services, dining, and construction materials.
The minister said inflationary pressure remains large as global energy prices show no sign of cooling. He also noted that entering the peak hot season could pressure electricity prices, while planned adjustments to healthcare and education service prices require close monitoring to ensure macroeconomic stability.
The Government has maintained a policy of waiving related taxes to cool the energy market. After eight adjustments, domestic fuel prices have fallen by 3% to 20.5% from the end of March, staying below regional price levels. However, with global oil prices still averaging above $110 per barrel, domestic fuel prices remain higher than a year earlier.
Finance Minister Ngo Van Tuan also warned that if global energy prices do not cool, inflation pressure could persist into the later months.
Phan Le Thanh Long, Chairman of AFA Group, said the April CPI should be viewed as reflecting ongoing inflationary pressure. He pointed to a 0.84% month-on-month increase in April 2026, indicating continued price momentum. More notably, CPI rose 5.46% year-on-year in April 2026, well above the 4.5% target set by the National Assembly for the year.
Long said that if the situation continues without effective external cooling measures, inflation by year-end could approach or exceed the target.
On a four-month basis, CPI rose 3.99% in the first four months of 2026. While the first two months were subdued, pressure from global oil prices in March and April lifted the figure. In addition, the USD/VND exchange rate depreciated by about 2.29%, adding to domestic price pressures.
Tran Ngoc Bao, CEO of WiGroup, said the current fuel price level owes much to government subsidies and tax relief. However, these measures are time-bound. When they end, domestic fuel prices may not fall sharply even if global prices ease, because budgetary offsets will need financing. He said this helps explain why macro pressures have not yet fully shown up in current inflation figures.
Economist Vo Tri Thanh forecast that inflation could rise by 0.4–1 percentage point depending on oil price movements. He analyzed the impact through three channels: energy (4% of the CPI basket), transport and logistics costs (10%), and indirect pass-through to consumer prices.
Thanh said market expectations that the Federal Reserve will cut rates only once this year could create a “double squeeze” on the exchange rate, making the path for lower interest rates more difficult. He also noted that inflation pressure can limit banks’ ability to cut deposit rates aggressively, since real interest rates must remain positive to protect savers.
Despite inflation pressure, authorities are pursuing a comprehensive policy mix to cool the economy. Tran Ngoc Bao said gasoline price movements directly affect transport CPI, while oil prices feed into future prices through higher transport and logistics costs.
He said the Government is implementing strong support through tax relief related to gasoline and diesel and increasing use of the price stabilization fund. These efforts aim to shield the economy from adverse effects of global energy prices and create room for sustainable inflation control.
Phan Thanh Chung of RMIT Vietnam emphasized a two-pronged approach: short-term measures to address immediate pressures and long-term reforms to strengthen resilience. In the short term, he said targeted support should be provided to vulnerable groups, including temporary environmental tax reductions, fuel import duty relief, and a boosted price stabilization fund for gasoline and oil. He said direct assistance should focus on low-income households, farmers, and transport workers, and that exemptions or reductions in taxes for logistics and fisheries could help reduce input costs.
Chung also advised against imposing new broad tax and fee burdens on businesses, suggesting the Government consider delaying the rollout of new broad-based taxes and fees. On monetary policy, he said the State Bank should maintain a cautious stance and ensure small and medium-sized enterprises have access to affordable credit to cope with energy costs. He added that temporary price controls on essential goods and services could help curb the spread of inflation.
To address price volatility, the Finance Ministry and the State Bank have outlined inflation scenarios at 4.5%, 5%, and 5.5%. Authorities are focusing on two main actions.
Maintaining inflation around 4.5% is viewed as a key element for stabilizing interest rates, preserving purchasing power, and creating a foundation for growth in 2026.
PHUONG MINH
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