Vietnam’s 2015 inflation falls to 0.63%, lowest in 14 years

Vietnam’s inflation in 2015 dropped to a 14-year low of 0.63%, significantly lower than the National Assembly’s 5% target, the latest data from the General Statistics Office (GSO) showed.

Vietnam’s 2015 inflation falls to 0.63%, lowest in 14 years

The consumer price index in December increased by 0.6% against the same month last year but remained largely unchanged from the previous month, up by a negligible 0.02%.

Low and stable inflation would create conditions for expansionary monetary policy and stimulate business activities, said GSO Director Nguyen Bich Lam.

Deputy head of the GSO’s price statistics department Do Thi Ngoc said low inflation in 2015 was primarily the result of a plentiful supply of grains and other foodstuffs as well as sharp falls in transport and utility costs, thanks to a slump in global energy prices.

Data showed that transport costs in 2015 declined by 11.92% over the past twelve months, driven by a nearly 25% reduction in petrol prices. Gas prices also fell by 18.6% from a year earlier.

Smaller increases in the prices of government-regulated goods and services than previous years also helped the consumer price index rise at a slower pace.

In 2015, the US dollar rose by 3.16% against the Vietnamese dong while the gold price index fell by 4.73%.

GSO Director Lam said that core inflation, which ran at 2.05% in 2015, has been going down and has become more stable since 2012 when the State Bank of Vietnam began implementing a proactive and flexible monetary policy with a view to achieving macroeconomic stability.

According to head of the GSO’s price statistics department Vu Thi Thu Thuy, Vietnam’s consumer price index in 2016 will be affected by upward changes in tuition fees, healthcare costs and electricity prices.

At the same time, increases in domestic consumer prices will also be restrained by continued sinking oil prices due to OPEC’s decision not to cut output and Iran’s return to the market, as well as lower agricultural products caused by more intense competition.