Vietnam’s Jan-Aug inflation hits five-year low

Thien Thanh Sanitaryware joint company

Vietnam’s Jan-Aug inflation hits five-year low

Consumer prices in Vietnam grew 1.84 percent in the first eight months of this year, the slowest pace since 2009, as demand for goods and services remained weak, an economist said.

n August alone, the Consumer Price Index (CPI), a closely watched measure of inflation, rose only 0.22 percent from the previous month, according to the General Statistics Office.

In the basket of 11 groups of goods and services used to calculate the CPI, food and foodservice prices saw the highest rise of 0.45 percent month-on-month in August, followed by clothing prices, which were up 0.32 percent.
Prices of housing and construction materials, meanwhile, fell 0.31 percent from July. Transport prices dropped 0.02 percent, driven by decreases in fuel prices in August.

Luu Bich Ho, former head of the Development Strategy Institute, told Thoi Bao Kinh Te Saigon Online that sluggish purchasing power was the main factor contributing to the low inflation.

Slow privatization of state-owned enterprises and rising bad debts in the banking system, among other things, have dragged on the country’s economy, resulting in weak demand, said Ho.

The government expects consumer prices to grow at 5 percent and the economy to expand 5.8 percent this year, a seventh straight year of economic growth below 7 percent.