The Consumer Price Index (CPI) in large cities like Hanoi and Ho Chi Minh City has continued to fall this month due to falling prices and decrease in purchasing power.
CPI in HCMC fell 0.57 percent in July against the previous month, but increased by 4.3 percent year-on-year, according to the City Statistics Office.
This was the highest fall in a month since 2003, the office said.
In 11 groups of goods and basic services, prices in only five groups increased slightly. Noteworthy was the education sector that witnessed an increase by 0.23 percent over the previous month. Five groups of goods showed reduced prices, of which two groups were down by 2.89 percent, while household utilities decreased by 2.15 percent.
Compared to January 7, 2011, CPI was up 4.3 percent, urban areas showing increase of 4.61 percent and rural areas by 1.87 percent.
Prices dropped 2-3 percent in transport, housing and building material sectors.
The cost of catering services also dropped 0.57 percent in line with falling rice and food prices.
Falling gas and petrol retail prices also had an effect, according to statistics offices in Hanoi and HCMC.
The Hanoi Statistics Office reported yesterday that the capital's CPI in July fell 0.29 percent against the previous month, but increased by 4.64 percent year-on-year. This was the biggest fall in CPI since the beginning of this year.
The cost of food and services fell by 0.21 percent, housing, electricity, water, fuel and building materials were down 1.2 percent, and transport dropped 2.9 percent.
Eight other commodity groups saw prices increase in July, the highest of which was garments, hats and footwear at 1.09 percent, followed by household utensils at 0.81 percent.
Explaining the increase in electricity prices from July 1, Dinh Quang Tri, deputy director general of Vietnam Electricity Group (EVN), said that input of electricity increased so that EVN was forced to increase electricity prices.
The electricity price increase by 5 percent will cause no major impact to the consumer price index.
The quota for poor households’ electricity usage under 50 kWh per month will not be increased and they will continue to benefit from a relatively cheap price of VND900 per kWh.