Support for households and businesses
Vietnam Electricity (EVN) introduced a new average retail electricity price of VND 2,159.9037 per kWh, excluding value-added tax, from November 1, representing a 2 per cent decrease from the previous rate.
Nguyen Dinh Phuoc, EVN's deputy general director, said the reduction reflected the utility's contribution to stabilising the macroeconomy while supporting social welfare for households and businesses.
He cited estimates from the National Statistics Office indicating that the price cut would reduce the CPI by approximately 0.08 percentage points from November.
Lower energy costs could support economic growth
Economist Nguyen Minh Phong, a member of the economic advisory council of the Vietnam Fatherland Front's Central Committee, said the economy faced several inflationary pressures in the final months of the year.
These included monetary inflation driven by looser fiscal, monetary and credit policies; imported inflation amid rising global prices; cost-push inflation caused by higher input costs, particularly fuel and energy; and demand-pull inflation as economic recovery and purchasing power strengthened.
Together, these factors were putting pressure on prices, while much of the room available to keep annual inflation within the government's target had already been used up after the first nine months, he said.
Phong said the government's flexible measures to ease pressure from public service prices, taxes and production costs were therefore necessary.
Lower electricity prices and other reductions in input costs would help businesses ease financial pressures and reduce production and operating expenses. Companies could also retain funds that would otherwise go towards tax and other state obligations, allowing them to strengthen their capital reserves.
Such support is particularly important as businesses continue to face high borrowing costs, interest rates and difficulties accessing credit.
Reducing input costs could also lower product prices, improve business competitiveness and help contain broader inflationary pressures, Phong said.