Inflation rate has plummeted

By An Chi - Jul 06, 2017 | 11:08 AM GMT+7

TheLEADERCompared with the same period in 2016, the average inflation rate in the first six months of 2017 is following a downward pattern.

Inflation rate has plummeted
The plunge in pork price contributed to the substantial CPI reduction. (Photo: Internet)

According to General Statistics Office (GSO) of Vietnam, the Consumer Price Index (CPI) has decreased by 0.17% compared with May 2017 and increased by 0.2% compared with December 2016.

The average CPI of the first six months increased by 4.15%, lower than the 4.96% increase in the first quarter. CPI of 2017 June increased by 0.2% compared with December 2016 and increased by 2.54% compared with the same period in 2016. The first six months of 2017 witnessed a 1.52% increase in core inflation rate compared with last year, which shows that inflation has been tamed and kept at a reasonable level.

Out of the 11 main sectors of consumption goods and services, price rise in eight has been reported. Housing and construction materials rose by the highest – 0.53%; culture, entertainment and tourism rose by 0.19%; beverages and cigarettes rose by 0.1%; education rose by 0.09%; appliances and household goods rose by 0.08%; clothes and footwear rose by 0.05%; other goods and services rose by 0.05%, and pharmaceuticals and healthcare service rose by the lowest – 0.01%.

In June 2017, three goods and services sectors having a decrease in CPI compared with May 2017 are foods services and restaurants (0.59%); transportation (0.71%), and postal services (0.01%).

The reasons for the substantial CPI reduction may include the plunge in pork price – one of the most common consumer goods. Besides, the CPI drop in transportation resulted from the recent price fixing in petroleum.

Regarding the CPI statistics in the first six months, it can be said that the inflation target of the whole year can be reached. However, this worries cattle farmers as the plummeting pork price in the beginning of 2017 put them in dire straits and need to be rescued by the authorities. After that, chicken egg price is reported to drastically drop.

Hence, some experts warned that a plunging inflation rate is not necessarily beneficial and sustainable, so officials should cautiously supervise inflation rates.