|Customers shop at Hapro supermarket in Ha Noi's Thanh Xuan District. Food and restaurant services, which account for a large portion of the CPI basket, saw a 0.03 per cent decrease. — VNA/VNS Photo Quang Quyet
HA NOI (VNS) — Viet Nam's consumer price index (CPI) fell in November 2014 by 0.27 per cent month-on-month largely because of decreasing transport costs, the General Statistics Office (GSO) revealed yesterday.
This is the second time the country's CPI has decreased since last March, when prices fell by 0.44 per cent from February.
The CPI increased in November by 2.6 per cent year-on-year, which was lower than the 3.23-per cent year-on-year increase last October but still the lowest CPI in the past 10 years, the GSO noted.
Do Thi Ngoc, deputy head of the GSO's CPI Department, attributed the decline to the 20-per cent fall in the retail prices of petrol, leading to a sharp reduction in transport costs of up to 2.75 per cent month-on-month, thereby contributing to a 0.24-per cent CPI decrease.
"Transport costs will continue to fall in the future," Ngoc said, adding that gas prices likewise posted a remarkable decrease. In addition, the prices of building materials and housing fell by 0.74 per cent.
Notably, the food and restaurant services groups, which account for the biggest portion of the CPI basket of goods and services, decreased by 0.03 per cent while the telecommunications group decreased by 0.01 per cent.
Seven of 11 goods in the basket saw a slight increase of 0.03 to 0.34 per cent. In particular, shoes, garments and textiles increased by 0.34 per cent because of a rise in demand for clothing during the cold season.
Entertainment and tourism increased by 0.1 per cent while education increased by 0.03 per cent and health care services, by 0.04 per cent.
Ngoc observed that the CPI this month reached its lowest level since 2009. This is abnormal because the index usually increases during the year-end months, she added.
The November CPI in the country's two big cities fell by 0.30 and 0.36 per cent. Other localities such as Da Nang, Hai Phong and Can Tho experienced the same decrease. In November, gold averaged VND3.5 million per tael and the US dollar, VND21,350.
Low 2014 CPI
Vietnamese Prime Minister Nguyen Tan Dung also said last week that Viet Nam's inflation this year would likely be below three per cent, its lowest level in decades.
Economist Ngo Tri Long agreed, saying the low CPI would have both positive and negative effects on the economy.
Long revealed that at the end of the third quarter, the country's GDP growth rate reached 5.62 per cent, so the growth rate for the entire year was expected to reach 5.8 per cent because of an expected increase in foreign direct investments and overseas Vietnamese remittances in the year-end months.
A CPI at 4.5 to five per cent will have a positive impact while that at three per cent will result in higher inventory, low purchasing power, decreasing investment and slow consumption, he added.
However, Long suggested that the Government refrain from increasing prices now, as high inventory, lower demand and increasing bad debts were causing the drop in the inflation rate.
If prices are increased, purchasing power will fail to recover and consequently, production will fail to improve, he warned. — VNS