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The H1 CPI rose by 1.47% over the same period last year, the lowest increase since 2016. Source: VNA

According to the General Statistics Office, the CPI in June 2021 increased by 0.19% compared to the previous month, 1.62% compared to December 2020, and 2.41% compared to the same period last year. The H1 CPI rose by 1.47% over the same period last year, the lowest increase since 2016.

The core CPI in June 2021 inched up 0.07% over the previous month and by 1.14% over the same period last year. The core CPI in H1 edged up 0.87% over the same period in 2020.

The rise in H1 inflation was driven by some reasons. That is, domestic gasoline prices rose by 17.01% over the same period last year, while gas prices increased 16.51%... The price of educational services jumped by 4.47% over the same period last year, due to the tuition fee increase for   the new school year 2020-2021 as regulated in the Decree No. 86/2015/ND-CP dated October 2, 2015 by the Government. The rice prices inched up 6.97% over the same period last year, due to the increase in domestic rice prices in line with export prices and high consumer demand during the Lunar New Year. The price of building materials rose by 5.03% over the same period last year due to the increase in the price of cement, iron, steel, and sand in line with the price of input materials.

According to economists, the H1 CPI is well controlled as compared to the 2021 CPI target. If there are no unexpected factors, the control of CPI for   2021 at 4% is possible. However, Vietnam’s competent authorities should be cautious with the very complicated price volatilities in H2.

In fact, the inflation risk for   Vietnam in 2021 is not great. As estimated by the Price Management Department under the Ministry of Finance, CPI each month in H2 still has room above 1% to ensure the 2021 target below 4%. Therefore, it can be seen that the CPI control in 2021 at about 4% is still under the control of the Government if there are not too sudden factors.

According to Dr. Nguyen Duc Do, finance specialist, if the price growth rate is maintained for   the rest of this year, about 0.27% per month, the annual inflation will go up from 2.41% in June to 3.28% in December 2021 and at the same time, the average CPI in 2021 will be at 2.12%. In the event that gasoline prices will continue to increase sharply and CPI might rise by 0.5%/month on average in the coming time, the annual CPI in December 2021 will be at 4.71%, but the average CPI in 2021 is only fixed at 2.53%.

According to the Ministry of Finance’s Price Management Department, the Inflation control not only aims at fulfilling the targets as assigned by the National Assembly, but also needs to satisfy the objectives of promoting growth, stabilizing the macro-economic foundation, supporting the fight against the COVID-19 epidemic, and serving as a leverage for   production and business as well as stabilizing consumer psychology. The control of the average CPI should be also directed to contain the annual CPI in December so as to set up a base for   controlling the inflation rate in 2022.