According to the General Statistics Office, the consumer price index (CPI) in January 2021 inched only slightly up by 0.06 per cent against December 2020.
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Nine out of 11 categories of goods and services saw a rise in CPI in January. Transportation rose the most by 2.29 per cent under the impact of rising gasoline and oil prices on January 11 and January 26, 2021 (raising the overall CPI by 0.22 per cent).
According to Bao Viet Securities (BVSC), the group with the largest weight (food and catering services) increased quite strongly by 0.64 per cent, mainly backed by the increased demand for the upcoming Tet holidays (food was up 0.83 per cent; foodstuff 0.81 per cent, and catering services 0.15 per cent).
The remaining groups that rose slightly included garments, hats, and footwear (0.44 per cent), education (0.33 per cent), and beverage and tobacco (0.32 per cent).
Meanwhile, housing and construction materials decreased by 2.31 per cent, mainly because provinces and municipalities implemented the Electricity of Vietnam's support package, reducing electricity prices and electricity bills for customers affected by the second wave of the COVID-19 pandemic.
This led to a 16.88 per cent decrease in the retail price of electricity in January, dropping overall CPI by 0.56 per cent.
Overall in January 2021, CPI decreased by 0.97 per cent on-year. Although this result is negative – while it was well in the green in 2020 –, it is not at all surprising in the context of the global pandemic. Given the recent resurgence of the epidemic, BVSC also expects reduced upwards pressure for the CPI in the upcoming Lunar New Year as consumption activities may be negatively affected.
Therefore, the CPI figures in the next two months (and maybe longer) may also stay in the red, before rebounding in the second half of 2021.