The information was announced by the General Statistics Office (GSO) on December 24.

Most products saw an average increase of 0.07-3.31 percent, except for post and telecommunication services where prices decreased by 0.02 percent.

The highest growth in price was seen in food and beverages, especially food (4.67 percent), followed by housing and construction materials (2.53 percent).

Products with more than 1 percent increase in CPI included garment and textile, hats, footwear, drinks, and tobacco. CPI for housing appliances, entertainment, tourism, transportation, pharmacy and medical services and education raised by less than 1 percent.

The unexpected CPI increase in December and the whole year were the results of domestic animal diseases, natural disasters and the hike in average prices of food in the global market.

Moreover, prices of many essential materials including gas and petrol and steel also jumped remarkably despite the efforts of state groups and corporations to stabilise the domestic market.

Vu Tien Thoa, Head of the Department of Price Management under the Ministry of Finance said that another reason for the double digit CPI was the inefficient use of investment capital that required urgent responses in monetary policies.

The increased purchasing power at the 1000^th anniversary of Thang Long-Hanoi, the fluctuating exchange rates and gold price also contributed.

Besides, neither producers nor consumers benefited from the state price policies because of unreasonable distribution of goods. The only benefices were the intermediaries who would make a fortune by speculating. This resulted in a bubble increase in prices.

Some experts predict that the 20-percent increase in prices of goods before the traditional Lunar New Year will further push some prices up. More money will be poured in the market as many large projects will be finished by the end of year, creating even more pressure on the prices.

To stablise the prices for the traditional New Year festival, the Prime Minister has issued a number of comprehensive solutions ranging from equilibrating supply and using monetary and fiscal policies to control the market.

The Ministry of Industry and Trade and the Ministry of Finance are implementing some measures including providing large businesses with preferential loans to store basic products, checking the illegal increase in prices, delaying the collection of the fees for animal slaughtering, flexibly using taxes and funds to control the prices of petrol and gas.

The Ministry of Industry and Trade instructed the businesses to follow the commitments made when they received loans to sell their goods at 5-10 percent lower than the market price while expanding their distribution to the grass root levels.

The GSO also noted that in 2011 prices for essential products, such as electricity, coal and gas, will be adjusted on schedule according to the rise in the average salary. However, the administrative offices should carefully follow the changes in price levels to avoid sudden price surges in many products simultaneously.

Also in December, the gold price index in the free market increased by 5.43 percent over November pushing the price increase rate of this year by 30 percent compared to that of December 2009 and 36.72 percent above the reviewed period last year. These figures show the largest fluctuation of gold prices in the past 15 years.

The US dollar prices also changed rapidly reflecting the State Bank of Vietnam’s policy on regulating foreign currencies. US dollar price in December increased by 2.86 percent over November and 7.63 percent over the same period last year.