Vietnamese inflation rate cushioned by dip in August food prices

Vietnam - The General Statistics Office of Vietnam said a dip in food prices in August will drag the consumer price index (CPI) down. The CPI is expected to rise by 1.56% month-on-month.

The prices for food and beverage (F&B) advanced by 0.5%, compared with 0.99% last month, but food alone was down 1.1%.

The new figure is higher than the 1.13% in July but lower than the 2.14% in June and 3.91% in May. Between January and August, the statistics office estimated that the CPI rose by 22.14%.

Ngo Tri Long, former deputy head of the Institute for Market and Price Research said, "The August CPI [hike] is acceptable in the context of the recent gasoline price increase."

The price of oil reached US$140 per barrel in July, causing gasoline prices to jump by 31%. Movement in global oil prices has a direct effect on many commodity prices in Vietnam.

Long said, "Goods prices in Vietnam usually remain stable in the third quarter before rising in the fourth. Vietnam's inflation scenario in the remaining months would depend on factors like the cost of imports, natural disasters and animal diseases."

Currently, local sources are suggesting that the Vietnamese government has given top priority to curbing inflation rates even if it means slowing growth.