>>> January CPI stays flat compared to last month
The January CPI growth was very slow, just below 1%, despite increases in prices of nine of the 11 categories of goods and services calculating the CPI. On the contrary, a 6.44% drop in fuel prices including those of fuel gas, petrol and diesel oil from last December dragged the overall CPI down 0.27%.
Prices of goods and services in the market generally remained stable, posing a positive signal to consumers and state management agencies. However, due attention still needs to be paid to the task of controlling the CPI because the calculation cycle for February CPI falls on the occasion of the Tet festival (CPI is regularly calculated from the 15th day of the current month to the 15th of the next month). This occasion usually sees a soaring demand for purchasing commodities, so opportunistic price rises will be inevitable unless effective measures are taken to enhance market management and stabilisation and ensure sufficient supply of goods and services. Notably, the recent severe cold spell could influence the provision of several goods items, especially food and foodstuff, driving prices on the verge of increasing.
As predicted by economists, the CPI will continue to rise but still at a moderate level in February before being possibly affected in March due to surges in prices of several health services since the first day of the month. Price increases of these medical services are part of a roadmap to adjust the prices of medical services in line with the market prices in order to gradually move towards the true value of these kinds of services. It is possible to take advantage of the current low level of CPI to work out a roadmap to adjust prices of several types of goods and services, including educational and health services and electricity, in line with the market prices. However, many experts also raise an alert that upward price adjustments must be considered under thorough research of impacts, avoiding high and sudden increases which will negatively affect inflation and people’s lives.
According to the General Statistics Office of Vietnam, a 10% increase in prices of medical services will result in a 0.34% hike in the CPI, while a 10% surge in prices of educational services can make the CPI up 0.58%. If prices of both these types of services rise 10%, the CPI will see a jump of 0.92%. The CPI will even leap 1.31% if prices of educational and medical services and electricity increase 10%.
Thus, the CPI will be under pressure to rise in the coming months due to upward adjustments in prices of several services according to the market price roadmap. However, this is a subjective factor and necessary interventions can definitely be made, regarding considering the time and level for price increases, in order to minimise the entailed impacts.
