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Petrol cuts help reduce CPI in May

Update: May, 25/2013 - 08:53
Customers buy dried seafood at a market in the Southern Province of Ca Mau. Falling prices led to May being the second month this year to register declining CPI. — VNA/VNS Le Huy

HA NOI (VNS)— The consumer price index in May inched down by 0.06 per cent against the previous month, making it the second month this year to show a decline, said the General Statistics Office (GSO).

The CPI in the first five months increased 2.35 per cent against December last year and 6.36 per cent against May last year.

Director of the GSO's Price Derpartment Nguyen Duc Thang attributed the slight decline to two petrol price cuts late last month. Thanks to the cuts, transport prices declined 0.57 per cent in May.

A 0.35 per cent reduction in prices of food and restaurant services also contributed to the index's slide in May, Thang said, adding that product prices even reduced during the country's major holiday seasons in May including International Labour Day and Hung King Death Anniversary.

Housing and construction materials also saw a price reduction of 0.53 per cent while post and telecommunication was down 0.07 per cent in the month.

In May, except for medicines and health-care services, prices of seven remaining commodities and services used to calculate CPI increased 0.02 per cent to 0.41 per cent.

Prices of medicine and health-care services reported the highest rise of 1.58 per cent on the back of fee increase and rising demand due to summer diseases.

As May was the second month for a CPI decline this year, some people were concerned it was a signal of a stagnant economy.

Though the statitistics office hasn't released the country's GDP growth yet, enterprises said their production and business performance faced difficulties and they had to cut production due to high inventories.

Industrial production growth was mainly dependent on foreign invested firms, which created a low added value for the country. Vietnamese firms were facing more difficulties and had to gradually narrow their production.

However, experts recommended the Government insist on keeping the macro economy stable.

A report from the Institute for Policy and Development said the country's GDP growth mainly depended on capital so that when the investment efficiency was low, it would cause a high credit demand and a high money supply, which were risks for high inflation.

The institute warned that, in the short term, targeting to meet both high economic growth and low inflation at any cost, risks falling into a spiral of high inflation and low economic growth. — VNS

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