Photo: Duc Anh
Year-on-year increase highest in five years.
The CPI in June rose 2.4 per cent year-on-year, 0.46 per cent month-on-month, and 2.35 per cent since last December, according the data from the General Statistics Office (GSO) released on June 24.
The increase was the highest in the month of June for five years. On a month-on-month basis, CPI in June 2014 was 0.3 per cent and in June 2015 0.35 per cent.
Ten of the eleven goods in the CPI basket increased.
The GSO identified five main reasons for the increasing CPI. The first is rising fuel prices, with gasoline having gone up by VND920 per liter on May 20 and diesel VND880 per liter on June 4, which contributed 0.27 per cent to the CPI increase.
Secondly, foodstuff prices rose 0.36 per cent. Consumers have been concerned about the quality of seafood after the mass fish deaths in central provinces and so switched to meat.
Thirdly, above-average temperatures have pushed up demand for electricity, with prices up 1.27 per cent as a result, which contributed approximately 0.03 per cent to the CPI. Fourthly, housing and construction materials prices increased following higher demand.
And, finally, the school summer holidays bring higher travel demand, with transport costs rising 0.48 per cent compared to May.
Inflation in the first six months is 1.72 per cent compared to the same period last year, the GSO reported.
Vietnam’s plan to keep inflation below 5 per cent in 2016 will be even more difficult to reach given the fluctuations in prices, according to Mr. Vo Tri Thanh, former Vice President of the Central Institute for Economic Management (CIEM).
“Vietnam’s mid-term goal is 6.5 to 7 per cent growth while keeping inflation below 5 per cent,” he was quoted as saying. “Keeping inflation under targets is not only a short-term goal.”