On November 17, 2023, the State Bank of Vietnam (SBV) organized a Workshop on Results of the inflation expectation survey in the fourth quarter of 2023 and recommendations for the inflation control in the coming time. Attending the Workshop, there was SBV Deputy Governor Pham Thanh Ha, representatives from the SBV Office, the Forecasting and Statistics Department, the Monetary Policy Department, the Communication Department, the Banking Strategy Institute; as well as representatives from the World Bank (WB), the International Monetary Fund (IMF), and several commercial banks, etc.
Deputy Governor Pham Thanh Ha delivers his opening speech
In his opening speech, Deputy Governor Pham Thanh Ha shared that, in order to successfully control the inflation, the SBV has closely coordinated with the Ministries and agencies to regulate the monetary policy in a flexible manner on the basis of collecting, analyzing, evaluating, and forecasting the international and domestic economic and financial developments. In order to obtain more information in support of the management of the monetary policy and the inflation control, starting from the first quarter of 2013, the SBV had conducted pilot surveys of inflation expectations of the credit institutions. In the fourth quarter of 2018, the SBV started the pilot surveys of inflation expectations of the economists. By 2016, the monthly inflation expectation surveys of the credit institutions had been officially listed in the List of the SBV's Statistical Surveys.
As compared to the decade-long history of inflation expectation surveys by the statistics agencies and big central banks around the world, it can be seen that the inflation expectation surveys in Vietnam are still at their initial stage with unavoidable limitations. However, the results obtained from the surveys of the credit institutions with the inflation expectations for the next one year, along with the results of the pilot surveys of the economists with the inflation expectations for the next two years have enabled the SBV to capture the inflation expectations more fully and comprehensively from the different entities in the economy. Up to now, measuring the inflation expectations using the surveying methodology has gradually contributed to forming a chain of expected inflation variables. This is one of the important "inputs" used by many central banks in the process of making monetary policy decisions.
An overview of the Workshop
The SBV Deputy Governor added that the relationship between the inflation expectations and the actual inflation has recently received more attention in light of a sharp increase in the global inflation rates after the COVID-19 pandemic. “All of Chapter 2 in the IMF's World Economic Outlook Report released in early October 2023 covers the topic of controlling expectations: Inflation and monetary policy. We hope that the new findings from the IMF's research topics shared at this Workshop will be discussed and supplemented", the SBV Deputy Governor emphasized.
The representative of the survey team, from the Forecasting and Statistics Department, reported on the results of the inflation expectation survey in the fourth quarter of 2023 and proposed possible solutions to control the inflation in the coming time. Accordingly, the report is composed of three parts as follows: Inflation expectations and the monetary policy; measuring inflation expectations in Vietnam; Proposing solutions to control the inflation in the coming time.
The participants at the Workshop all agreed that, in order to control the inflation, apart from the monetary policy tools, capturing the inflation expectations and "anchoring" the reasonable inflation expectations would contribute to controlling the inflation more effectively. Besides, an effective policy communication strategy also plays an important role in controlling the inflation. To successfully control the inflation, it requires synchronous, close and harmonious coordination between the fiscal policy and other macro policies.
Mr. Nguyen Phi Lan, Deputy Director General in charge of the Forecasting and Statistics Department, speaks at the Workshop
Toward the end of the Workshop, Mr. Nguyen Phi Lan, Deputy Director General in charge of the Forecasting and Statistics Department, affirmed that the SBV would continue to closely monitor the macro-economic developments, manage the monetary policy in a consistent and flexible manner in order to control the inflation, contributing to maintaining the macro-economic stability, as well as the stability of the money and the forex markets.
Le Hang