Increasing Food Costs Affect CPI in Vietnam
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Increasing food costs during social distancing period has been identified as the main reason for the climb in the Consumer Price Index (CPI) in August, which was up 0.25% from July, 2.51% from December 2020 and 2.82% compared to the same period one year earlier respectively.
However, from January to August 2021, the CPI increased only 1.79% compared to the same period in 2020. This is the lowest growth rate recorded since 2016, in addition to core inflation of just 0.9% in the first 8 months of 2021.
A report by the General Statistics Office of Vietnam showed that the CPI in urban and rural areas in August rose 0.34% and 0.14% respectively compared to one month earlier. In the 11 groups of consumption goods and services, four groups observed an increase in prices, four a reduction and three stabilized.
The food and drink service group recorded the highest increase in price at 0.74%, contributing majorly to the general rise in CPI of 0.25%.
According to the General Statistics Office, this was due to stricter transportation and delivery requirements to ensure Covid prevention, coupled with sharp increase in food demand in areas currently under social distancing.
|Increasing food costs due to social distancing affected the CPI in August 2021. Photo: Tap chi Cong thuong
The education group also observed an increase in August (0.04%) due to the rise in stationery prices (0.34%), and the medicine and medical service group rose 0.02%.
On the contrary, the transportation group recorded a decrease of 0.06% compared to July 2021 due to a reduction in car prices. Similarly, the posts and telecommunications group were down 0.05% due to lower smartphone and tablet prices (down 0.16%), accompanied by a reduction in smartphone and tablet accessory prices (down 0.5%).
Affected by Covid, the culture, entertainment and tourism and the textile and apparel groups observed a reduction of 0.03% compared to one month earlier; the latter was hit hard by the plummeting in consumption needs due to social distancing and lockdown.
Core inflation lowest in 10 years
In general, the price index of the food group rose 0.69% in August, of which the rice group accounted for 0.44%. Specifically, a kilogram of jasmine rice currently ranges from VND 11,600-12,500 per kg and sticky rice from VND 24,700-34,500 per kg.
According to the General Statistics Office, the demand for food purchasing and consumption climbed as major provinces and municipalities entered social distancing under Direction 16, which also led to limited supplies and increasing transportation costs.
Affected by these occurrences, the core inflation in August decreased 0.02% compared to July, but was up 0.98% compared to the same period one year earlier. On average, Vietnam recorded a slight increase of 0.9% in core inflation in the first 8 months of 2021 compared to the same period in 2020.
|The Rice price index rose 0.44% in August 2021. Photo: Tuoi tre
The General Statistics Office noted that the rise in core inflation was lowered than that of the average CPI (1.79%), reflecting the fluctuation in consumption costs due to increasing food, gas and electricity prices. Both the core inflations in August and from January to August 2021 were the lowest recorded since 2011.
“Facing the Covid-19 pandemic, all sectors are working to implement synchronous solutions under the guidance of the government to prevent the pandemic and stabilize market prices,” according to Nguyen Thu Oanh, director of the Price Statistics Department under the General Statistics Office of Vietnam.
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