Inflation holds steady despite Tet demand

Inflation holds steady despite Tet demand

The consumer price index (CPI) in February rose by only 1.32 per cent against the previous month, lower than expected thanks to abundant supplies of essential commodities, the General Statistics Office (GSO) reported.

Compared with the same period last year, CPI was up 7.02 per cent, the office said.

Director of the GSO’s Price Department Nguyen Duc Thang said that a sufficient supply of essential commodities, especially in big cities, during the week-long Lunar New Year holiday in February halted the increasing price trend that usually occurred during the holidays.

Monthly CPI often increases by more than 2 per cent at Tet.

In addition, price stabilisation programmes also helped to cool prices.

The slow place of CPI was also attributed to many businesses cutting Tet bonuses by 10 per cent compared to 2012. The national economy’s sluggish recovery also had an impact on spending during Tet.

Ten out of the 11 groups of commodities saw price hikes ranging from 0.03 per cent to 2.28 per cent. The highest rise was seen in the restaurants and catering services group, while education experienced the lowest increase.

Food prices this month witnessed a modest increase of 0.37 per cent, mainly because of a 0.85 per cent fall in the price of rice in the Mekong Delta.

Two groups of commodities that also saw price increases were beverage and transportation due to high demand during the Lunar New Year.

During February, gold prices dropped by 0.33 per cent while the US dollar price saw a slight increase of 0.03 per cent.

The CPI in March and the following months are expected to rise following an increase in oil and gas prices.

If retail petrol prices were adjusted upwards by VND1,000 per litre in late February or early March as proposed by petrol businesses, March’s CPI would rise an additional 0.1 per cent, the office estimated.

Though there has been no official information about a price hike, many petrol stations have used a variety of excuses to stop services in the hopes of making higher profits in the near future.

One of the most popular excuses used in HaNoi’s suburbs and neighbouring provinces was “power failure” and “out of fuel”. Many of those still in operation only have one employee on duty in order to limit the amount of fuel sold.

Nguyen Thanh Phuc, deputy head of da Nang’s Market Watch Department, said they would tighten control over the activities of petrol stations and carry out inspections to see whether their excuses to not sell petrol were legitimate or not.

One petrol station in HCM City complained that wholesalers were not providing a steady supply of fuel.

Previously, petroleum companies, including Viet Nam National Petroleum Group (Petrolimex), Dong Thap Petroleum Trading Company (Petimex), Sai Gon Petro Company and PetroVietnam Oil Corporation (PVOIL) asked the Ministry of Finance for a price adjustment.

Even though their request did not ask specifically for an increase or decrease in price, Tran Ngoc Nam, deputy head of Petrolimex, said they were incurring losses.

Nguyen Tien Thoa, head of the Price Management Department at the Ministry of Finance, said enterprises were under pressure because global demand had surged, leading to a 2-3 per cent increase in the world price. The supply has also decreased recently because many plants have temporarily closed for maintenance.

A number of international organisations have also forecast that fuel prices will continue to increase.

vietnamnews