Experts fear inflation with sharp rise in CPI

Consumer Price Index in September rose 6.48 percent as compared to the same period last year and 5.13 percent against December 2011, according to GSO, adding that all the 11 baskets of commodities used to calculate the country's CPI data surged this month.

The highest price hike was seen in medicine, healthcare services and education, in light of the Government's decision to raise prices of products and services from this month.

The biggest price hike of 17.02 percent was in medicine and healthcare services, of which healthcare services surged 23.87 percent. Higher prices of medicine and healthcare services alone added 0.95 percent to the country's CPI rise in September.

With a price hike of 10.54 percent, education also added 0.6 percent to this month's CPI rise.

GSO's Consumer Price Index Department announced that the prices of medicines, healthcare services and education, which are controlled by the Government, were rising too fast.

The CPI should be kept at a single digit figure this year as targeted by the Government, as this month's CPI rise was not because of an imbalance in goods supply and demand or a monetary policy. The country still saw a high inventory and a slow credit growth rate of only 1.4 percent at end of August.

Experts explained that the price hike on medicines, healthcare services and education would affect the CPI only one time and would not continue next month.

GSO reported that due to the recent petrol price hike, transportation prices also rose 3.83 percent while housing and construction material prices climbed 2.18 percent.

Not included in the CPI components, gold prices in September rose 5.25 percent while US dollar prices in the month edged up by 0.06 percent on-month.

With this month's rise, experts are concerned that inflation would continue in the last months of the year and warned relevant ministries to take a close look at it to avoid high inflation next year.

All 11 groups of goods and services used for the CPI calculation were on an upward trend in September.

Food and catering services, weighing 39.93 percent in the CPI’s price basket, increased marginally by 0.08 percent from the previous month.

The group posted an average increase of 10.42 percent in January-September.

Two groups, on the other hand, that witnessed a sharp rise from the previous month were housing-construction materials and drugs- medical services, picking up 2.03 percent and 17.02 percent, respectively.

After getting the green light to hike prices in July this year, the latter has increased two months in a row with an average rise of 8.61 percent in the first nine months of 2012.

The telecommunications group saw another slight increase of 0.01 percent from the previous month, bringing its average monthly rise to a minus 1.34 percent so far this year.

Previously, the CPI in Hanoi and Ho Chi Minh City, the two biggest cities in Vietnam, were reported to take a U-turn, with a 2.47 percent and 1.21 percent rise in September, respectively.

The latest CPI figure of the capital city, the steepest rise since April last year, represented a 5.4 percent increase in 2012 and a 6.49 percent year-on-year rise.

In September alone, the trade deficit was estimated at US$100 million, which was a reversal compared with a trade surplus of $51 million in August. The previous two months of June and July saw Vietnam's trade balance in surplus state.

Specifically in September, Vietnam's export turnover was estimated at $9.7 billion, down by $600 million compared with August.  While   import turnover was $9.8 billion, down from $10.25 billion in August.

In the first nine months of the year, 18 groups showed export turnover above $1 billion.

In particular, textiles and garments occupied top position with $11.25 billion, followed by mobile phones and accessories with $8.55 billion, crude oil with $ 6.34 billion, electronics, computers and components with $ 5.36 billion and seafood with $ 4.14 billion.

Source SGGP. Translated by MT

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