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Rebound in food prices puts July CPI at 0.11%

Released at: 14:38, 31/07/2017

Rebound in food prices puts July CPI at 0.11%

CPI in the first 7 months of 2017. Source: VnEconomy

CPI increases after falling in June and May, GSO reports.

by Quang Huy

After two months of falling, Vietnam’s consumer price index (CPI) rose by 0.11 per cent month-on-month in July; its lowest level for nine years, according to figures from the General Statistics Office (GSO).

The increase comes after declining by 0.53 per cent and 0.17 per cent in May and June, respectively. Compared with July last year, the CPI rose 2.52 per cent but was down against the 0.13 per cent to 1.17 per cent increases from 2008 to 2016.

Eight of the eleven groups of goods and services posted price increases in the month: housing and construction materials, up 0.03 per cent, apparel, hats and footwear up 0.04 per cent, beverages and cigarettes up 0.04 per cent, education up 0.05 per cent. household equipment and appliances up 0.09 per cent, medicine and medical services up 0.36 per cent, restaurants and catering services up 0.54 per cent, and goods and other services up 0.73 per cent.

Meanwhile, three out of the eleven saw price declines: transport, down 1.52 per cent, posts and telecommunications down 0.06 per cent, and culture, entertainment and tourism down 0.03 per cent.

The July increase was mainly driven by higher prices in food, including increases in the price of pork, following six months of declining prices, and rises in vegetable prices due to the impact of storms and floods, according to the Deputy Director of the GSO’s Consumer Price Index Department, Ms. Do Thi Ngoc.

Another factor was the higher prices for housing and construction materials, which was due to tightened management over sand mining in localities, resulting in higher prices for sand. The rise in prices for medicine and healthcare services also contributed to the country’s average CPI, Ms. Ngoc said.

The entrance exams to the 10th Grade and the national high school graduation exams held in July helped boost demand for dining out and beverages, contributing to the CPI increase. The July CPI was subdued due to an abundant supply of food and declining prices of petrol compared to May.

Earlier this month, Deputy Prime Minister Vuong Dinh Hue said the target of keeping the country’s inflation rate at below 4 per cent in 2017 is perfectly feasible. To meet the goal, however, he said that ministries and agencies must stay abreast of supply and demand matters and avoid imposing administrative procedures, so that, gradually, the price of essential public services can be modified based on the market price roadmap.

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