Drastic measures urged to curb inflation

Price hikes remained a huge challenge to the government, Dung said.

According to the Ministry of Planning and Investment (MPI), the consumer price index in April soared 3.32 percent, the highest month-on-month rise since 1990.

In the first four months of this year, inflation hit 13.95 percent. From January to April, the country's export value reached US$26.9 billion, 35.7 percent higher than the same period last year and triple the target set for the period. However, the trade deficit in April stood at $1.4 billion, a record high.

Finance Minister Vu Van Ninh attributed the soaring CPI to global price rises and the increasing cost of petrol, power and coal.

He also said high interest rates had added to the cost of producing goods and affected banks' liquidity. Meanwhile, the high trade deficit in April was partly attributed to rising imports of luxury goods.

The Prime Minister has called on authorities to keep a close eye on the socio-economic situation both here and abroad, and particularly the price of oil, petrol, food and other input materials. Ministries, agencies and localities were ordered to fully implement Government Resolution 11 designed to curb inflation and stabilise the macro-economy.

Dung said this year's inflation must not rise above 13 per cent, while economic growth should exceed 6 per cent.

He said related ministries needed to tighten management controls, tax luxury imports and prevent tax evasion.

Dung said the prices of oil, petrol and power were subject to market forces. However, he said management needed to be more transparent to prevent speculation.

He also said speculators should be strictly punished.

Meanwhile, an MPI report stated that the ministry, localities and State-owned groups and corporations had cut public investment by nearly VND97 trillion ($4.6 billion). Ministries and central agencies have suspended 225 construction projects worth VND899 billion ($42.8 million). The money earmarked for these schemes will be invested in 280 other urgent projects.

State-owned groups and corporations have also postponed 907 projects, worth a combined VND39 trillion ($1.9 billion), the report said.

Dung asked the MPI to continue reviewing the list of investment projects and to ensure there was enough capital for urgent projects capable of being completed this year.