February’s consumer price index (CPI) increased by 0.45 per cent over January, driven by higher fuel and housing prices after the Tet (Lunar New Year) holiday, data from the General Statistics Office (GSO) on Tuesday showed.
The average CPI in the first two months was 4.6 per cent higher than in the same period of last year. Meanwhile, core inflation, which excludes volatile products like food and energy, increased by 5.08 per cent. The difference is due to lower petrol prices since July 2022, which affect CPI but not core inflation.
Among the 11 main consumer goods and services groups, five saw a price increase, while six saw a decline.
The highest increase was seen in the transport sector, with a rise of 2.11 per cent, mainly due to a surge in fuel prices by 5.66 per cent and a hike in public transport services by 2.58 per cent due to high travel demand during Tet.
In the housing and construction materials sector, prices increased by 1.81 per cent, primarily due to an increase in gas prices of 14.56 per cent. Daily electricity prices increased by 1.12 per cent, and housing maintenance materials increased by 0.99 per cent. In contrast, the price of kerosene decreased by 1 per cent, and domestic water decreased by 2.06 per cent.
Among the six groups seeing a decline in prices, education witnessed a drop of 0.57 per cent, followed by food and catering services by 0.17 per cent. Other groups including beverage and cigarettes, postal and telecommunications, garments, hats, shoes, and cultural, entertainment and tourism groups, decreased by between 0.02 per cent and 0.12 per cent.
During February, the domestic gold price increased in contrast to the world gold price, which declined following the US Federal Reserve's decision to raise interest rates to curb inflation. The higher interest rate will likely discourage investment in gold, resulting in a 0.98 per cent decline in the gold price, averaging US$1,858.35 an ounce compared to January 2023.
In contrast, the domestic gold price index increased by 0.92 per cent month-on-month and 2.62 per cent compared to the same period last year. Ending February, the domestic gold price increased by 3.1 per cent.
Meanwhile, the average US dollar price in the free market was around VND23,740 in February, up 0.2 per cent month-on-month and 3.67 per cent year-on-year. The two-month growth was 3.42 per cent.
Earlier, experts suggested that Viet Nam's inflation, which has been continuously rising for over half a year, might have peaked in January (up 0.52 per cent) and will gradually slow down due to weak demand.
GSO’s February data showed the total retail revenue from goods and services was estimated at VND481.8 trillion ($20.4 billion), down 6 per cent from January. The two-month figure is estimated at VND994.2 trillion, up 13 per cent year-on-year, but accounting for only 77 per cent of the pre-pandemic level.
However, Saigon Securities Inc (SSI) has still warned that the inflation increase has exceeded the normal average level of 2-3 per cent during this time every year and is equivalent to that of developed countries.
Viet Nam’s inflation this year is expected to be unpredictable and the Government's 4.5 per cent target may be challenging to achieve. Developed countries have already experienced inflation peaks and now developing countries like Viet Nam may face the same, according to SSI. — VNS