July’s CPI records the lowest rise over six years

The country’s Consumer Price Index (CPI) in July went up by only 0.06 percent from June, the lowest level so far against Julys since 2004. This is also the lowest increase since the beginning of the year.

The General Statistics Office says with this slight fluctuation, the CPI for the past seven months rose 4.84 percent over December 2009 and 8.67 percent against the same period in 2009.

July’s CPI for the first time increased in only eight out of 11 groups of commodities. The most significant increase was seen in drinks and tobacco (0.41 percent), followed by household goods and appliances (0.39 percent). Goods such as textiles, garments and shoes posted an increase of 0.35 percent.

July is the month of college and university entrance exams but the prices of educational products and services rose by only 0.11 percent.

Although restaurant and related services saw an 0.21 percent increase, food dropped by 0.97 percent, causing a dramatic impact on the CPI’s decline.

Other sharp declines were found in transport (0.94 percent), housing and construction materials (0.47 percent), and post and telecommunications (0.07 percent).

The low CPI in July is attributed to bumper rice crops and the drop in the price of rice, petrol and oil. Another factor is the slight fluctuation in the CPI in the two economic hubs, with HCM City down by 0.09 percent and Hanoi up by 0.25 percent against June.

However, experts warn that Vietnam is coming into the storm season with many unforeseen difficulties ahead, which could possibly lead to a serious imbalance between demand and supply. Major cities, especially Hanoi and HCM City, are urged to continue their efforts to stabilize the eight essential goods, while the government needs to proceed with flexible measures to manage the macro-economy.

In July, gold prices on the market went up by 2.15 percent from June, and by 35.86 percent against the same period in 2009.

Meanwhile, the price of the US dollar has risen 0.38 percent against June and 5.04 percent against a year ago after merchant banks raised their deposit interest rates and boosted the purchase of the US dollar.

Tags: Vietnam CPI, Vietnam economic, Vietnam economy