February CPI falls on spiralling oil prices
Vietnam's consumer price index (CPI) fell by 0.05% in February compared to January and 0.25% from December 2014, according to the General Statistics Office (GSO).
CPI has been falling for four consecutive months since November 2014, with a 0.27% fall in November last year, 0.24% in December and 0.2% in January this year.
This month was also the first February – the month in which the Tet (Lunar New Year) holiday is often celebrated – to witness a fall in CPI since 1996.
According to Nguyen Duc Thang, director of GSO's CPI department, the fall in CPI during the last four months broke the normal fluctuation CPI records in the months ahead of the Tet holiday.
Normally, CPI records rise in prices during the months leading to the Tet holiday, due to rising consumption of goods.
The GSO expert said that plunging oil prices were the primary factor for falling CPI in February. The domestic oil price dropped nearly 12% in January.
Statistics showed that due to the falling oil price, the transport service rates reduced by 4.41% in February compared to the previous month, pushing down the country's CPI.
In addition, the prices of goods were more stable than during the previous years' Tet holiday, without huge increases in prices, which also contributed to a low CPI.
Statistics showed that the rates of food and catering services – the group with the highest percentage among 11 major groups of goods and services in the CPI basket – increased only 0.53% this month. The food and catering service rates were 3.65% in February 2011; 2.11% in 2012; 2.28% in 2013; and 1.15% in 2014.
Three other groups that saw fall in rates included housing and construction materials, transport services and telecom services.
There was a 0.4% drop in CPI in HCM City and a 0.07% drop in Hanoi in February.
The fall of CPI in the first two months of this year has signalled that inflation will continue to be restricted to a low level this year.
Although falling CPI raised concerns about deflation, Planning and Investment Minister Bui Quang Vinh said at a government meeting in January that the fall of CPI during the last few months was not sign of deflation, but caused by plunging oil and petrol prices in line with the world price fluctuations.