Vietnam August inflation slows to 5-year low

Vietnam's consumer price index (CPI), the main gauge of inflation, in August increased 0.07% against the previous month, but dipped 0.12% versus the end of 2019, both at the weakest levels in the 2016 – 2020 period, according to the General Statistics Office (GSO). 

Data: GSO. Chart: Ngoc Thuy.

Overall, the CPI in the first eight months of this year increased by 3.96% year-on-year.

Seven out of 11 commodity groups that are components of the basket for CPI calculation witnessed month-on-month increases in prices. Among them, education posted the sharpest increase of 0.18% as some major institutions raise tuition fees for the 2020 – 2021 school year, along with prices hikes in school stationery as demands grows ahead of a new school year, contributing 0.01 percentage point to the overall CPI growth. 

Other groups that saw their prices up in August were food and catering services (0.11%); transportation (0.1%); housing, water and electricity supply, and construction materials (0.1%); beverages and cigarettes (0.05%); medicine and healthcare services (0.02%); and other goods and services (0.2%).

The three groups that saw their prices down in August were culture, entertainment, and tourism (-0.2%); post and telecommunications (-0.05%); garment, footwear and hats (-0,03%); while household equipment and appliances remained unchanged.

According to the GSO, core inflation in August went down 0.01% month-on-month, resulting in an increase of 2.16% year-on-year and a rise of 2.66% in the January – August period compared to the same period of 2019.

Domestic gold prices continued the growing trend due to global uncertainties from the Covid-19 pandemic. Meanwhile, the escalating US – China trade tension prompted investors to turn to gold as a safe investment option.

In August, gold prices increased 9.86% month-on-month, 32.81% against last December and 35.02% year-on-year.