Inflation slows growth of retail sales

August 31, 2011 | 14:52

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The total value of retail trade and services reached VND1,224 trillion ($59.72 billion) during the first eight months of this year, an increase of 22.2 per cent over the same period last year, reports the General Statistics Office (GSO).

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Considering inflation, however, the value rose by only 3.9 per cent, the lowest rise since the beginning of this year, the GSO said.

Vu Manh Ha, a senior expert in the GSO Trade Department, blamed the period's slower retail sales pace on higher inflation, 15.6 per cent, compared with 6.12 per cent and 13.29 per cent in the first and second quarters, respectively.

The increasing consumer price index had led consumers to curb spending, Ha said.

During the period, commercial sector revenue, which accounted for nearly 80 per cent of the nation's total consumption revenue, rose by 22.5 per cent year-on-year. This figure represented a 0.7 per cent drop in comparison with the first seven months of this year.

The service sector, accounting for nearly 10 per cent of the total revenues, experienced a 22.7 per cent rise while the tourism sector saw a 14.8 per cent increase.

From January to August, the stockpile index in the manufacturing and production sector rose by 17.8 per cent against the same period last year, or 1.8 per cent higher than in the first seven months.

Retail sales would likely maintain the period's growth rate or slightly increase in the remaining months of this year due to several festivals and the Tet (Lunar New Year) holiday, Ha forecasted.

Last year, the country's total retail sales value of goods and services jumped by 24.5 per cent to VND1,561 trillion ($74.3 billion) against the previous year.

Modern retail chains currently account for 20 per cent of distribution in the country. This level is low compared with other countries in the region. However, experts have predicted this figure would grow to around 31.2 per cent by 2015.