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March CPI sees lowest increase in a decade

Update: March, 19/2014 - 08:54
The CPI rise this month will reflect the petroleum price hike of VND300 per litre late last month, Phuong said, adding that the price rise might also affect transport fares and restaurant prices.— Photo dddn

HA NOI (VNS)— The country's consumer price index (CPI) will register an insignificant increase this month due to low demand, experts have forecast.

The HCM City Securities Company (HSC) this week said that the CPI is likely to inch up only 0.08 per cent against the previous month, the lowest rise for the past decade. Compared with the same period last year, the index will rise 4.93 per cent, it anticipated.

HSC said that the CPI's rise was lower than previously expected due to low demand and the close price management by the relevant agencies.

The Government in its regular meeting late last month also decided to adjust down the annual inflation target to 6 per cent from 7 per cent as estimated early this year.

According to the online news portal Vietstock, Tran Hong Minh, head of Vietcombank Securities' Market Research Division, also stated that there would be no significant change in inflation this month, adding that the index will rise between 0.05 per cent and 0.1 per cent.

Nguyen Mai Phuong, director of the Maritime Bank Securities' Research Division, said that March's consumption demand will be lower than February which witnessed the country's largest holiday of Tet (Lunar New Year). The CPI in February inched up 0.55 per cent against the previous month, marking the lowest price hike in the past decade, even though February often sees the CPI rise to the highest level of the year as the domestic demand is very high.

The CPI rise this month will reflect the petroleum price hike of VND300 per litre late last month, Phuong said, adding that the price rise might also affect transport fares and restaurant prices.

Phuong said that the rise of CPI to date this year was very low as the consumers had tightened their belts, while the prices of goods were stable and reasonable.

She forecast that the CPI might hit the bottom in the first quarter and then rise in the second quarter.

HSC said that the low CPI was one of reasons for the State Bank of Viet Nam deciding to cut policy interest rates by 0.5 percentage points yesterday, making the decision the first of its kind in nine months. Negative credit growth and good liquidity in the banking system were the other causes for the rate cut, HSC said. — VNS

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