CPI forecast to slow further

The consumption price index (CPI) in September is expected to continue its decline at a rate of 0.8 per cent, according to the Ministry of Industry and Trade’s Market Watch Team.

The expectation was attributed to a decline in food prices due to an increase in supply, a decline in petrol and oil prices and the stable price for other goods.

The team said the price of rice might have a slight increase in the near future because prices were currently elevated.

In the next months, pork prices would stabilise while chicken prices would have a slight drop and the price of salt might increase a bit nationwide.

Fertiliser prices were expected to surge sharply in coming months due to a high demand of the product for the rice crop by the end of the year.

Meanwhile, the price of animal feed would see a slight decline due to the stability in the world market, the team said.

According to the Viet Nam Animal Feed Association, price stabilised in August at VND9,578-11,028 per kilo for pig feed and VND10,198-11,234 per kilo for chicken feed.

For building materials, the price of cement is expected to stabilise but steel prices will surge in September due to increasing demand. The price of input and material, including coal, high interest rates of bank loans and transport fees will also push steel price up.

The team also said the price of gas would plunge due to lower prices on the world market, while coal was stable.

The team attributed the coal price stability to stability in production and finished-products of industries using coal and also in the domestic rice market by the end of this year.

The General Statistics Office also expected the CPI slowdown to continue next month with a monthly rise of less than 0.9 per cent.

However, director of the office’s Pricing Department Nguyen Duc Thang said it would be difficult to meet the Government’s target of keeping the CPI under 17 per cent this year, since there were still many factors that could cause a CPI rise in the remaining months of the year.

To meet the target, the CPI for the rest of the year must not increased by more than 0.33 per cent each month.

However, CPI often significantly increases in the last quarter of the year due to high demand during festivals such as Christmas and New Year, Thang said.

The CPI in August rose 0.93 per cent against the previous month – the lowest monthly rise since January this year – due to a series of Government measures aimed at controlling inflation, the office said.

Thang attributed the CPI slowdown to the decrease in food and foodstuff prices, which resulted from a rising supply, especially of rice and pork.

Tags: Vietnam CPI 2011, Vietnam economic, Vietnam economic growth, Vietnam economy, Vietnam economy 2011