CPI rises as food and fuel spike

Tuesday, Mar 01, 2022 08:27

People filling their bikes at a gas station in Ha Noi. There have been reports of fluctuations in consumer prices mainly due to rising prices of food and fuel. — VNA Photo

Viet Nam's CPI has increased by 1 per cent in February and 1.42 per cent from the same period last year, according to the General Statistics Office of Viet Nam.

The office said the increased CPI was a result of rising global petrol prices and the after effect of the Tet holiday, which typically raises prices due to a spike in demand.

In the first two months of 2022, CPI climbed by 1.68 per cent over the same period last year, and core inflation by 0.67 per cent.

In February, among the 11 commodity and service baskets, 10 reported increases, with the highest seen in transport. Meanwhile, prices of post and telecommunications declined by 0.04 per cent.

The GSO pointed out that core inflation in February rose by 0.49 per cent over the previous month, and by 0.68 per cent over the same period last year. In the first two months, core inflation increased by 0.67 per cent year-on-year, lower than the general average CPI, which reflects the fluctuation of consumer prices mainly due to rising prices of food and fuel.

Since February 21, the price of RON 95 gas has hit a record high at VND26,000 per litre, driving up the prices of products and services. For example, Grab has added an extra fee of VND2,000 to its food delivery service. Transport firms are expected to raise their prices as they had done so in the past when petrol prices increased sharply.

In addition, prices of consumer goods have been reported to be on the rise, especially vegetables as northern Viet Nam suffered from a historic cold spell that laid waste to a large part of its vegetable production area. It would take a few weeks at least for the price to fall back to a normal level as production recovers.

Aside from petrol and vegetables, the vast majority of commodities have returned to the pre-holiday price level, said a representative from the Ministry of Industry and Trade (MoIT).

Economists have expressed concern over rising prices in the global market as economies are bouncing back from the pandemic, which typically produces stronger demand for commodities. Meanwhile, supply remained inadequate as the global supply chain has been severely disrupted and has not fully recovered.

Key commodities including energy, industrial steel, rare metals and agricultural products have been reported to be at a higher price level compared to pre-pandemic, especially medical supplies due to rising COVID-19 infections.

Earlier, the government announced a reduction in VAT, from 10 per cent to 8 per cent in order to combat rising CPI and inflation. Meanwhile, measures have been taken to increase the production of key commodities to meet market demand, according to MoIT.

The ministry said it has been working closely with local governments across the country to better respond to the demand for goods and services in each region and to ensure fluid distribution as a way to prevent shortages of goods and rising prices.

In addition, the ministry's market watch force has been tasked to step up inspection and investigation to deter speculation and hoarding of key commodities, especially petrol. Meanwhile, the ministry will continue to publicly broadcast supply and demand information of important goods and services. — VNS

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