Vietnam's consumer price index (CPI) saw an increase of 0.49% in May against the previous month, up 1.5% versus the end of 2018 and 2.88% year-on-year, according to the General Statistics Office (GSO).
This resulted in an increase of 2.74% year-on-year for the CPI in the first five months of 2019, the lowest growth rate for a five-month period over the last three years.
Hikes in petroleum and electricity prices directly led to a higher CPI in May, however, a combination of the impact of African swine fever and the government’s effort in keeping flexible monetary policy kept the inflation rate at a low level, stated the GSO.
Nine out of 11 commodity groups, which are components of the basket for CPI calculation, witnessed monthly hikes in prices. Among them, transportation posted the sharpest increase of 2.64%, contributing to an overall increase of 0.25% percentage points, mainly due to an increase in fuel retail prices on May 2 and 17.
Other groups that saw their prices increase were housing, water and electricity supply, and construction materials (1.28%); beverages and cigarettes (0.18%); garment, footwear and hats (0.12%); household equipment and appliances (0.11%); culture, entertainment, and tourism (0.1%); education (0.05%); food and catering services (0.05%); other goods and services (0.13%)
Two groups that saw their costs down in May were medicine and healthcare services (0.06%) and telecommunications (0.05%).
According to the GSO, core inflation in May picked up 0.13% month-on-month, resulting in an increase of 1.9% year-on-year on average in the January - May period.
This led to an increase of 1.85% in the core inflation rate in the first five months compared to the same period of 2018.
Previously, experts said under favorable conditions, it is feasible for Vietnam to tame inflation at below 4% as targeted in 2019, citing the CPI below 4% and the core inflation rate under 2% over the past few years as reason.
Deputy Prime Minister Vuong Dinh Hue has recently said that the government will keep inflation at 3.3%-3.9% this year.
Vietnam Institute for Economic and Policy Research (VEPR) in its latest annual economic report said it will be a hard task to control inflation in 2019 and the rate is likely to reach 4 – 5%.
In 2018, the CPI increased by 3.54% against 2017, below the target of 4% set by the National Assembly.