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  • De Cuong VI Mo - Phan 4

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    Thanh Phung
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    A sharp increase in international petrol prices would burden Vietnam's economy in several ways. It would lower citizens' standard of living as expenditures on petrol rise relative to income, forcing people to cut back on other goods and services. It would also put pressure on inflation as the higher price of petrol, a key input, would be passed on to higher prices for many economic outputs and the consumer price index. If petrol prices continue to escalate, Vietnam's economy could face long-term instability issues across major industries and society.

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    De cuong vi mo_phan 4

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    A sharp increase in international petrol prices would burden Vietnam's economy in several ways. It would lower citizens' standard of living as expenditures on petrol rise relative to income, forcing people to cut back on other goods and services. It would also put pressure on inflation as the higher price of petrol, a key input, would be passed on to higher prices for many economic outputs and the consumer price index. If petrol prices continue to escalate, Vietnam's economy could face long-term instability issues across major industries and society.

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    8 views1 page

    De Cuong VI Mo - Phan 4

    Uploaded by

    Thanh Phung
    A sharp increase in international petrol prices would burden Vietnam's economy in several ways. It would lower citizens' standard of living as expenditures on petrol rise relative to income, forcing people to cut back on other goods and services. It would also put pressure on inflation as the higher price of petrol, a key input, would be passed on to higher prices for many economic outputs and the consumer price index. If petrol prices continue to escalate, Vietnam's economy could face long-term instability issues across major industries and society.

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    The effects of increasing the price of petrol on the Vietnamese economy

    Vietnam only can domestically manufacture a third of the required volume of petrol. Therefore, a sharp increase in international petrol prices can cause a burden to the Vietnamese economy in two main ways:
    -

    Lower citizens standard of living.

    Total expenditure on petrol rises relatively compared to income. People must cut down on certain goods/services in exchange for petrol. - Make pressure to push up inflation rate A rise in the price of petrol, an important input in many economic industries, involves a rise in the price of outputs as well as CPI index. That CPI index goes up affects buying power of people and increase inflation rate. In short, the Vietnamese economy will be on the verge of longterm instability if the price of petrol continuously escalates. (Increasing petrol price => increasing energy expenses => recession on some major industries such car manufacture, aviation + inflation => instability in society)

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