Major cities see modest deflation

Major cities see modest deflation

The Consumer Price Index (CPI) in major cities has continued to drop this month due to the impacts of falling prices and lower purchasing power.

Falling gas and petrol retail prices had also had an effect, according to statistics offices in Ha Noi and HCM City.

Lower purchasing power was attributed to the economic crisis and falling incomes.

The Ha Noi Statistics Office reported yesterday the capital's CPI in July fell 0.29 per cent against the previous month, but increased by 4.64 per cent year-on-year.

This was the biggest fall in CPI since the start of this year, the office said.

The cost of food and services fell 0.21 per cent, housing, electricity, water, fuel and building materials were down 1.2 per cent, and transport dropped 2.9 per cent.

In July, prices plunged by 1.51 per cent for rice, 0.57 per cent for food and by 8 per cent for a 12-kg gas canister.

Eight other commodity groups saw prices increase in July, the highest of which was the garment, hat and footwear at 1.09 per cent, followed by household utensils at 0.81 per cent.

CPI in HCM City fell 0.57 per cent in July against the previous month, but increased by 4.3 per cent year-on-year, according to the HCM City Statistics Office.

This was the highest fall for the month since 2003, the office said.

Prices dropped between 2 and 3 per cent for the transport and housing and building material sectors.

The cost of catering services also dropped 0.57 per cent in line with falling rice and food prices.

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