Vietnam Electricity Group ended the support program to reduce electricity prices and electricity bills for customers; the price of food, foodstuff, outdoor eating and drinking increased and the price of public transport service during the Lunar New Year was the main reasons made the consumer price index (CPI) in February 2021 increase by 1.52% over the previous month – the highest increase of the index in February in the past 8 years[1] and 1.58% over December 2020. However, compared to the same period last year, CPI in February increased only by 0.70% – the lowest increase since 2016 until now[2]. On average, in the first 2 months of 2021, CPI decreased by 0.14% over the same period last year, the core inflation increased by 0.64%.
In the increase of 1.52% of the consumer price index (CPI) in February 2021 compared to January 2021, there were 10/11 groups of goods and services have increased price indexes and 1 group of goods and services kept prices stable. The housing and construction materials group had the highest increase of 4% (making the overall CPI increase by 0.75 percentage point), of which: Electricity’s price for living in February increased by 20.06% (making the overall CPI increase by 0.66 percentage points)[3]; the price of materials, the main housing maintenance grew by 1.31%; the price of gas rose by 6.74% and the price of oil rose by 4.35%. Food and catering services increased by 1.61%, mainly due to strong consumer demand during the Lunar New Year, of which: Food rose by 1.77%[4]; foodstuff went up by 1.82[5] (making the overall CPI increase by 0.39 percentage points); outdoor eating and drinking grew 1.01%). Transport group increased by 1.55% due to the impact of 2 upward adjustments of petrol and oil price on January 26th, 2021 and on February 25th, 2021, the petroleum price index increased by 3.28% (making the overall CPI grew by 0.12 percentage points), besides, the demand for people’s travel during the Lunar New Year increased, so the price of public transport services increased[6] and the demand for shopping and repair at the end of the year up, causing an increase in the price of some vehicles and vehicle maintenance services. Beverage and cigarettes increased by 0.9% due to consumer demand and as gifts for Tet, the price of non-alcoholic drinks increased by 0.49%; alcohol and beer increased by 1.26%; smoking increased 0.64%. Garments, hats and shoes grew by 0.25%. Household appliances went up by 0.2%. The culture, entertainment and tourism group grew by 0,13% due to the increase in the price of flowers and ornamental plants. The postal services and telecommunications grew by 0.03%. The medicine and medical service group went up by 0.01%. Other goods and services increased by 0.74%. Particularly the education group still unchanged.
CPI of February 2021 increased by 1.58% compared to December 2020 and by 0.70% over the same period last year; the average CPI of the first 2 months in 2020 decreased by 0.14% compared to the same period in 2020.
Core inflation in February 2021 increased by 0.48% over the previous month and increased by 0.79% over the same period last year. The average core inflation of the first 2 months of 2021 grew by 0.64% compared to the same period of 2020.
The domestic gold price fluctuated in the opposite direction of the world gold price. On average, the world gold price as of February 24th, 2021 decreased by 2.7% compared to January 2021 because investors were optimistic about the economic recovery that would boost bond yields, making gold less attractive. Domestically, gold trading enterprises continued to keep high prices before Lunar New Year, also, On the God of Wealth day of the month, the demand for gold increased, gold price index in February 2021 increased by 0.25% compared to the previous month; an increase of 2.42% compared to December 2020 and increased by 25.08% over the same period last year.
The US-dollar on the world markets fell in the context of strong virtual currencies attracting investors. Domestically, the foreign currency reserve of the State Bank of Vietnam is abundant to meet the foreign currency demand of importing enterprises. The US-dollar price index in February 2021 decreased by 0.17% over the previous month; decreased by 0.33% compared with December 2020 and dropped by 0.76% over the same period last year.
[1] The increase/decrease of CPI in February over the previous month of period of 2014-2021: up 0.55%; down 0.05%; up 0.42%; up 0.23%; up 0.73%; up 0.8%; down 0.17%; up 1.52% respectively.
[2] CPI growth rate in February over the same period last year in period of 2016-2021: 1.27%; 5.02%; 3.15%; 2.64%; 5.4%; 0.70% respectively.
[3] In January, localities implemented Official Letter No. 9764/BCT-DTĐL, dated on December 18th, 2020 of the Ministry of Industry and Trade on support to reduce electricity prices, electricity charges for customers affected by the epidemic Covid-19 batch 2.
[4] Mainly due to the increase of 2.19% in price of rice (making the overall CPI increase by 0.06 percentage points) due to the increase in the price of export rice and consumption demand on Tet holiday making domestic rice price go up.
[5] The price of pork increased by 4.88%; prices of processed products from pork increased (prices of roast meat, spring rolls increased by 3.28%; other processed meat increased 0.99%); prices of chicken increased by 3.15%; prices of other poultry meat increased by 1.36%; prices of beef increased by 3.72%; fresh seafood prices rose 2.75% by serving the ceremony of Mr. Cong, Mr. Tao and preparing the Lunar New Year. Particularly, the price of green vegetables decreased by 4.67% due to the abundant supply.
[6] Road passenger transport prices rose by 5.86%; train fares increased by 8.39%.