Inflation pressure eases on fuel price cuts

Wednesday, Aug 31, 2022 08:28

People buy petrol at a station in Ha Noi. Significant drops in petrol prices in August helped ease inflation pressure. — VNA/VNS Photo Tran Viet

The inflation pressure eased significantly in August on Government efforts to bring down petrol prices although prices of other goods and services kept increasing, according to the General Statistics Office.

GSO’s update on Monday showed that the consumer price index (CPI) increased slightly by 0.005 per cent in August over the previous month – the lowest increasing rate of August during the past five years, compared to the highest rate of the five-year period recorded in August 2018 at 0.45 per cent.

The CPI in August rose 3.6 per cent against December 2021 and 2.89 per cent against the same month last year.

On average, the CPI rose 2.58 per cent in January – August, demonstrating that the inflation pressure was easing significantly on Government efforts at cutting petrol prices from the beginning of August.

The eight-month CPI in the past five years was highest in 2018 at 3.52 per cent.

Cutting fuel prices on August 1, 11 and 22 altogether brought down petrol prices by 14.52 per cent and diesel oil prices by 12.9 per cent compared to the previous month, making the price index of the transport services fall by 5.51 per cent.

GSO said that the drop in transportation services prices contributed to pushing down CPI in August by 0.53 percentage point.

However, for January-August, domestic fuel prices increased by 45.33 per cent against the same period last year after 14 hikes and eight cuts, pushing up the overall CPI by 1.63 percentage points.

Among 11 goods and services components in the CPI basket, nine increased in August over the previous month, except for transport and gold.

Restaurant and catering services increased by 1.05 per cent and food by 1.33 per cent, in which pork prices rose by 4.95 per cent on rising animal feed prices.

Education rose by 1.46 per cent as some provinces and cities under the central management increased school fees for 2022-23.

Other components increased by between 0.18 per cent to 0.73 per cent.

Core inflation, which excluded prices of food, energy and goods and services subject to State management, in August rose by 0.4 per cent over July and 3.06 per cent over a year ago.

In January-August, core inflation increased by 1.64 per cent, lower than the overall CPI of 2.58 per cent, demonstrating that the price increase was mainly from food and fuel.

Amid global uncertainties, Prime Minister Pham Minh Chinh has stressed that stabilising the macro-economy and controlling inflation remain the top priority.

At the end of July, the PM sent a document to ask management agencies to increase the control of prices of goods and services after strong drops in fuel prices.

Government efforts in reducing fuel prices gave room to control inflation at below 4 per cent this year as set by the National Assembly.

The Ministry of Finance forecast the CPI this year at 3.37-3.87 per cent while the GSO forecast 3.4 – 3.7 per cent. — VNS

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