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Food prices drag May CPI down

Update: May, 30/2017 - 09:00
Consumers shopping for meat at Big C Thăng Long Supermarket in Hà Nội. — VNA/VNS Photo Vũ Sinh
Viet Nam News

HÀ NỘI — Consumer price index (CPI) dropped by 0.53 per cent in May from the previous month, mostly due to a sharp fall in food prices, the General Statistics Office (GSO) said on Monday.

This month’s CPI rose 0.37 per cent from last December and 3.19 per cent from the same period of 2016. The five-month figure hiked 4.47 per cent from last year.

Seven of the 11 groups of main commodities and services saw slight price increases, namely culture, entertainment and tourism (up 0.13 per cent); household appliances and goods (0.1 per cent); beverage and cigarette (0.08 per cent); garment, footwear and hat (0.05 per cent); and medicine and health care services (0.04 per cent); education (0.02 per cent); and other goods and services (0.15 per cent).

Price declines were recorded in the four remaining groups. Food and catering service prices sank 1.43 per cent, followed by transport services (0.34 per cent), postal and telecommunication services (0.05 per cent), and housing and construction materials (0.02 per cent).

Đỗ Thị Ngọc, deputy director of the GSO’s Price Statistics Department, said in the group of food and catering services, grain food prices decreased 0.06 per cent in May because northern provinces have been harvesting the winter-spring rice while rice export became stagnant.

Foodstuff prices, which makes up the biggest proportion in the food and catering services group, declined 2.27 per cent, mainly due to fresh meat. Notably, pork prices plummeted 9.94 per cent from April, due to a surge in supply, unchanged demand and Chinese traders’ decreasing purchases.

She added that petrol prices were cut on May 5 and 20, leading to a 0.71 per cent fall in fuel prices compared to the previous month.

Meanwhile, there were factors hampering a further drop in CPI, including the hot weather, which fanned electricity consumption that in turn boosted power prices up by 0.98 per cent. The hot weather also spurred the demand for cooling equipment and summer apparel and footwear. Housing maintenance materials grew 0.93 per cent as construction sand prices soared after sand mining was restricted nationwide, she noted.

In May, domestic gold prices fluctuated in line with global gold prices, dropping 0.1 per cent from April to around VNĐ36 million (US$1,853) per tael. The price of US dollar also declined slightly to VNĐ22,600 – 22,700 per dollar.

The GSO said that core inflation, which is the CPI excluding grain food, fresh foodstuff, energy and the State-managed goods of health care and educational services, increased 0.08 per cent in May month on month and 1.33 per cent year on year. Five-month core inflation rose by 1.56 per cent from a year earlier, lower than the planned inflation of 1.6-1.8 per cent, indicating a stable monetary policy.

CPI in June is likely to be the same or fall slightly from May, since pork and poultry prices will still follow the downward trend. Meanwhile, stronger tourism demand in summer will augment eating and hospitality service prices. Price increases are also predicted for electricity, water and petrol, according to the GSO. — VNS

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