TABLE OF CONTENT

INTRODUCTION ........................................................................................................ 2
1. Inflation between 2010 – 2011 .............................................................................. 3
a. Inflation movements in 2010 ............................................................................. 3
b. Inflation movements in 2011 ............................................................................. 3
c. Causes of inflation in 2010 - 2011 ..................................................................... 4
d. Impacts of inflation on the economy in 2010 – 2011 ....................................... 4
e. Government’s actions to control inflation ....................................................... 4
2. Inflation in 2011 – 2019 ......................................................................................... 5
3. Inflation in 2020-2022 ............................................................................................ 6
a. Inflation in 2020 .................................................................................................. 6
b. Inflation in 2021 .................................................................................................. 6
c. Inflation in 2022 .................................................................................................. 6
4. Inflation in 2023 ..................................................................................................... 7
a. The inflation situation in 2023 ........................................................................... 7
• The inflation situation in January ........................................................................ 7
• The inflation situation in February ..................................................................... 7
• The inflation situation in March ........................................................................... 8
• First quarter of 2023 ................................................................................................. 8
b. Inflation causes ................................................................................................... 9
c. Government Action ............................................................................................ 9
CONCLUSION ........................................................................................................... 10
REFERENCES ........................................................................................................... 11

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 INTRODUCTION
It is widely known that inflation can be understood as the increase of the overall level
of prices in the economy in a given period of time, or in other way, inflation occurs
when prices increase. However, this is not always the case, for example, the rise of
products’ prices during Tet cannot be considered as inflation since it is only a temporary
fluctuation of prices. Therefore, the situation of inflation happens only when prices
surge for a long duration of time.

Another worth – mentioning about inflation is that it is inevitable. To be specific,

almost every nation in the world can hardly escape inflation, it never remains in a certain
state of stability, or drops to absolute zero as the economy changes rapidly over time.
Moreover, high inflation in a country can pose a serious threat of creating detrimental
repercussions on that country as it can put the country in a crisis, damaging not only its
economy, but also every field of that country. Hence, the governments need to be aware
of it to take appropriate actions to secure it to a safe level.

Although inflation appears in every country in this world, each nation is in its
distinguished situation of inflation regarding distinctive geographies and histories. In
this report, only Vietnam’s inflation from the year of 2010 to 2023 will be thoroughly
discussed by us. The overall statistics of Vietnam’s inflation is relatively high since
2004 when compared to the world. To be particular, during the period of 2010 to the
end of 2011, Vietnam’s inflation rate reached to 2 digits (18.58%). That number only
started to drop to a sustainable number in the following year due to the effectiveness of
the government policies.

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1. Inflation between 2010 – 2011:
a. Inflation movements in 2010:
In 2010, the inflation rate of the whole country was 11.75%: The consumer index (CPI)
in December 2010 of the whole country increased by 1.98%, thereby pushing the
inflation rate of the whole country in 2010 to 11.75% over the same period of the whole
country in 2009.
This number exceeds nearly 55 compared to the target set by the National Assembly at
the beginning of the year (about 8%).
DIỄN BIẾN TỐC ĐỘ TĂNG CPI 2010

We can see high inflation in the first months of the year and at the end of the year, the
increase is large, the highest month compared to the lowest month is more than 1.5%.
In the first 3 months of the year, CPI increased, but immediately after that, there were
5 consecutive months of low increase to nearly 0%, then surpassed 1% in the remaining
4 months of the year.
b. Inflation movements in 2011:

In general, since the beginning of the year, the country's inflation has increased by
15.68% compared to the end of 2010. Compared with the same period last year, the
current price level has been 23.02% higher. In general, our country's inflation has tended
to increase significantly since the beginning of the year. The Consumer Price Index
(CPI) increased sharply from January with 1.78% compared to the previous month and
peaked at 3.32% in April. The next time the CPI tends to decrease when in May, 6.7
has a value of 2.21%, 1.09%, 1.17% respectively with the previous month. especially
in August, and September, this figure fell below 1%, limiting the growth of inflation.

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c. Causes of inflation in 2010 - 2011:

The Committee cited the World Bank report as shown in the chart. Based on the above
actual data, it can be seen that the main cause of Vietnam's inflation is not due to external
factors.
So, experts say that the internal weakness of the economy is the biggest cause of
inflation. Firstly, cost-push inflation: domestic inflation is affected by cost-push,
However, the impact of cost-push on inflation is only to a certain extent, not a decisive
factor for high inflation. The second is demand-pull inflation. Demand-pull inflation in
Vietnam is reflected in the rapid increase in aggregate demand, which is reflected in
two aspects:
o (i) Total means of payment (M2) has always maintained a high growth rate. In
the period 2007-2010, M2 doubled, while nominal GDP means an increase by
1.73 times and real GDP by only 1.2 times.
o (ii) Actual output in recent years has increased too high compared to the
potential, thereby causing inflation.
In addition, the overheated development of the real estate market, the stock market, the
serious dollarization, and digitization caused a large amount of social capital not to be
directly invested in production; “inflation expectations” are much higher than in other
countries in the region, forming “psychological inflation”.
d. Impacts of inflation on the economy in 2010 – 2011:
An increase in inflation creates serious challenges that could have negative impact on
the enterprises’ production, business activities, and spreads anxiety in people’s minds,
affecting the flow of money, which could lead to a decrease in economic growth.
The irregular warning of asset markets (stock, real estate, ….) is also another reason for
the demand – pull occurrence since people who suddenly become rich have the tendency
to increase the amount money they spend, increasing in aggregate demand in the whole
economy.
Regarding the problem of cost – push inflation, a common example is a supply shock,
causing a deficit in supply or an unusual rise in input prices that increase the overall
price of the economy.
e. Government’s actions to control inflation:
In 2010, a monetary policy was operated by the government in order to curtail the
interest rates of institutions. Regarding the exchange rate, it is of necessity to have
definitive and versatile measures alongside present regulations on foreign exchange to
overcome the exchange rate systems. As for the gold market, the act of gold importing
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and transparent information strengthening on state administration are regarded to be
vital for this activity.
In 2011, the government took action of aggregate demand management to balance the
supply and demand of goods and services in all situations. The following measure is to
moderately organize inspection and control of the market, hinder commercial fraud and
speculation, and continue to implement measures to manage the gold and foreign
exchange markets. Finally, promote information and communication on the policy of
price stabilization measures, inflation control, and macroeconomic stability.

2. Inflation in 2011 – 2019:

In general, in the period 2011 - 2019, inflation has been controlled.

In the years 2011-2012, inflation increased due to several reasons such as the
increase in the price of input materials for production (such as gasoline, oil,
electricity), the price of medical services and education increased, food prices
increased (due to severe drought and saltwater intrusion), along with a sharp
increase in the USD/VND exchange rate. That caused the currency to depreciate
during this period.
In 2012, the Government introduced appropriate policies, inflation increased by
6.81%, much lower than the threshold of less than 10% that the Government set
target. Thanks to the appropriate policies in 2012 that were fully promoted and at
the same time the State Bank actively implemented appropriate management
solutions, the inflation rate in 2013 was at 6.04% lower than the inflation target.
issue 8%. Inflation in 2014 was only 1.84%, much lower than the whole year
inflation control target set by the Government of 7%.
Notably, in 2015 there was a record low inflation rate (0.6%) the lowest since
2001. According to the General Statistics Office, the main reason was due to the
sharp drop in world gasoline prices leading to the high inflation rate. inflation in
2015 reached a low level. At the same time, falling world prices also reduce
domestic production costs, indirectly reducing inflation.

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In the 2016-2020 period, Vietnam's macro-economy remains firmly stable,
inflation is controlled and maintained at a low level, creating an environment, and
driving force for socio-economic development. Commodity prices are relatively
stable. The average consumer price index (CPI) in the 2016-2020 period reached
about 4%, a sharp decrease compared to the 2011-2015 period (7.65%), within
the set target range (under 4%). From 2016 to 2020, the average core inflation
over the years was well controlled, kept at a relatively stable level, averaging
1.64% in the same period, down from the same period in the 2011-2015 period
5.15%.
Thanks to good control of inflation:
o Macro-economic stability is maintained.
o The foreign exchange market and the exchange rate market are stable.
o Foreign exchange reserves increased to a record.
o Liquidity of the banking system gradually improved.
Look at those positive signals that international credit rating agencies have based
and implemented to raise Vietnam's credit rating.
To do that, monetary policy tools are actively and flexibly operated by the State
Bank of Vietnam. Besides, it also closely combines with appropriate monetary
and fiscal policies to control and bring the inflation rate from a high level of 23%
(August 2011) to 6.81% (2012) respectively, decreased by 0.63% (in 2015) and
stabilized in 2016-2019 at a low level.

3. Inflation in 2020-2022:
a. Inflation in 2020:
The year 2020 observed a rise of 3.23% in CPI compared to the figure in 2019. The
inflation rate of the former year exceeds the latter year by 2.31%. In addition, the two
waves of the COVID-19 pandemic, along with social distancing, resulted in a
significant decrease in the price of services and products. However, the high-priced
product for 2020 is set at the price level at the end of 2019. That is why it can be said
that Vietnam has managed the inflation rate well in this difficult situation.
b. Inflation in 2021:
2021: Inflationary pressure from factors such as the new COVID 19 wave or tensions
between Russia and Ukraine have greatly affected the supply chain. This means that by
2021, global inflation is expected to reach 3.8 percent, the highest in 10 years. In the
U.S. alone, the average consumer price index (CPI) in 2021 increased by 4.7% and
inflation tends to rise. In Vietnam, however, this percentage is only 1.84%. This figure
demonstrates the effectiveness of the way the economy is managed by the State.
c. Inflation in 2022:
In 2022, the world will have to face a record high inflation rate. In the United States,
the inflation rate is record high, up to 8%. Inflation in the European region is also at
9.2%. Vietnam is one of the countries with a low inflation rate compared to the general
level, with a figure of 3.15%, below the previously set 4% target. The success in
controlling inflation in our country comes from reasons such as: ensuring the production
and supply of food goods, food, especially in the midst of the focus of the Russian-

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Ukrainian conflict; the timely, rigorous and decisive operation of the Government in
providing timely solutions on taxes, supply, price support.

4. Inflation in 2023:
a. The inflation situation in 2023:
• The inflation situation in January:

(source:www.gso.gov.vn)
The Lunar New Year in January 2023, so people's shopping demand increases, the
prices of goods and services increase according to the consumption rules on Tet holiday;
The increase in domestic gasoline prices in line with world fuel prices and the
adjustment to environmental protection tax rates from January 1, 2023 are the factors
that made the consumer price index (CPI) in January 2023 increase by 0.52 % compared
with the previous month. Compared to the same period in 2022, January CPI increased
by 4.89%; core inflation in January 2023 increased by 5.21%.
• The inflation situation in February:

(source:www.gso.gov.vn)
According to a report by the General Statistics Office on February 28, compared with
December 2022, the consumer price index (CPI) in February increased by 0.97% and
increased by 4.31% over the same period last year. On average, in the first two months
of 2023, CPI increased by 4.6% over the same period in 2022 and it’s quite worrisome

7
when our inflation targets this year is raised to 4.5% by the National Assembly, which
is quite a high level, however, January and February when the average is added up it's
4.6%.
Statistical analysis shows that, in the 0.45% increase of CPI in February 2023 compared
to the previous month, there are 5 groups of goods and services with an increase in price
index, and 6 groups of goods with a decrease in price index.
In which, the transportation group had the highest increase, increasing by 2.11% mainly
due to the increase in gasoline and oil prices by 5.66% (making the overall CPI increase
by 0.2 percentage points) and the increase in passenger transport services due to
People's travel demand in the Lunar New Year has increased sharply.
Besides, the impact of housing and construction materials increased by 1.81% compared
to the previous month is also a significant reason affecting the increase of CPI in recent
times.
• The inflation situation in March:

(source:www.gso.gov.vn)
Food prices fell due to ample supply; The decrease in gasoline and gas prices in line
with world fuel prices was the main reason for the consumer price index (CPI) in March
2023 to decrease by 0.23% compared to the previous month. Compared to December
2022, CPI in March increased by 0.74% and over the same period last year by 3.35%.
In the first quarter of 2023, CPI increased by 4.18% over the same period last year; core
inflation increased by 5.01%.
• First quarter of 2023:
Domestically, the macro-economy is stable, inflation is controlled, major balances are
basically guaranteed. Money market with stable exchange rate and decreasing interest
rate. Before, during and after the Lunar New Year of the Rabbit, the market supply and
demand situation was vibrant as an annual rule; the supply of goods was abundant and
abundant, there was no shortage of goods, fully meeting the demand. people's demand.
The consumer price index in the first quarter of 2023 increased by 4.18% over the same
period in 2022.
Compared with other countries, Vietnam is not in the group of countries with high
inflation when the consumer year. Inflation PI in March 2023 increased by 3.35% over
the same period last year. Inflation of the euro area in February 2023 increased by 8.5%
over the same period last year; US inflation increased by 6% and the US Federal

8
Reserve (FED) continued to maintain a tight monetary policy. In Asia, China's February
2023 inflation increased by 1% over the same period last year; Thailand increased by
3.8%; Korea increased by 4.8%; Indonesia increased by 5.5%; Philippines up 8.6%;
Laos increased by 41.3%
b. Inflation causes:
In the first quarter of 2023, the world commodity market is affected by many economic,
political and social factors. The world situation continues to be complicated and
unpredictable, the military conflict between Russia and Ukraine has not stopped,
monetary policy is tight, interest rates are high, consumption and economic activities
decline in the world. The large scale in many countries has affected the prices of goods
on the world market. Geopolitical and economic factors exert various pressures on oil
prices such as the European Union's ban on Russian oil products; OPEC+ decided to
keep the production restriction measures unchanged; US oil and refined products
reserves increased sharply; China officially lifted most of its entry and exit restrictions
and the outlook for oil consumption is positive in the country.
c. Government Actions:
In 2023, in the context of many difficulties and challenges, to achieve the set goals,
plans and targets assigned by the National Assembly, it is necessary to make great
efforts. In particular, it is necessary to have a consistent view of maintaining
macroeconomic stability, controlling inflation, promoting growth, and ensuring major
balances of the economy.
In the macro solutions, there are two policies that need to be focused on in operation,
flexibility, efficiency, and caution. Those are monetary policy and fiscal policy.
Currently, with the impact of the world monetary policy, in the management process, it
is necessary to be sensitive, timely and flexible, both to ensure the fight against
difficulties brought about by the world, but also to ensure the supply of goods and
services. provide enough resources for the economy to maintain operations and develop.
Third, it is necessary to immediately review all remaining policies and growth drivers
of the economy to focus on the impact, taking the growth of favorable areas to offset
the difficult areas.

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 CONCLUSION
To conclude, as it is shown in the report, the inflation rate of 2011 was regarded as the
peak of Vietnam’s inflation, the highest to ever be seen in Vietnam’s history. However,
the data drastically plunged from 2012 to 2015 and then had a moderate rise in the
following years, significantly in 2020 because of the COVID – 19 Pandemic, when the
ever – increasing speed of prices showed no sign of procrastinating. The steady increase
only stopped and decreased until 2021 due to the government’s successful policies to
prevent Vietnam’s economy from going downhill, making Vietnam become one of the
few countries in the world to have remarkably low inflation rates during the pandemic.
However, as spoken in the introduction of the report, the secure and stable state of
inflation is a thing every nation wishes to obtain but none can practically do so, Vietnam
is also a victim of this constant fluctuation. By the end of the year 2022 to the beginning
of 2023, the world economy was in a massive shock when the war between Ukraine and
Russia broke out, having a great impact on the world in general and Vietnam in specific.
Even though the war was foreseeable, and the government came up with suitable
methods and actions to minimize the influence, Vietnam has yet to fully escape the
effects that war brought upon the world. Nevertheless, Vietnam still has many bright
spots, stable macroeconomic activities, controlled inflation, and basically guaranteed
major balances. The average CPI in the first quarter of 2023 only increased by about
4.2 - 4.3% over the same period in 2022. The movement of core inflation showed a
tendency to decelerate, except for January 2023 coinciding with the Lunar New Year.

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