Consumers’ demand for shopping after the Lunar New Year decreased according to the annual rule, the decrease in the price of foodstuff due to abundant supplies were the main reasons for the consumer price index (CPI) of March 2021 to drop 0.27% over the previous month, up 1.31% over December 2020. Compared to the same period last year, CPI in March increased by 1.16%, the lowest level since 2016[1]; average CPI in the first quarter of 2021 increased by 0.29%, the lowest increase level in the past 20 years[2]. Producer price index (PPI) for agriculture, forestry and fishery products in the first quarter of 2021 increased by 1.34% compared to quarter IV/2020 and by 4.54% compared to the same period last year; PPI for industry products increased by 1.04% and by 0.27%; PPI for services increased by 0.01% and fell by 0.27%; the price index of raw materials, fuel used for production increased by 2.14% and 4.63%. The merchandise export price index in the first quarter of 2021 increased by 0.75% over the quarter IV/2020 and decreased by 0.3% over the same period last year; the merchandise import price index increased by 1.54% and by 1.2%. Merchandise’s term of trade in the first quarter of 2021 decreased by 0.78% compared to the quarter IV/2020 and decreased by 1.49% over the same period last year.
a) Consumer price index
In the decrease of 0.27% of the consumer price index (CPI) in March 2021 compared to February 2021, there were 7/11 groups of goods and services have decreased price indexes, of which: Food and catering services had the highest decrease of 1.46% (making the general CPI decreased by 0.49 percentage points), of which: Food rose by 0.01%; foodstuff went down by 2.2%[3]; outdoor eating and drinking fell 0.23%). Consumption demand for goods and services of people after Lunar New Year decreased, so beverage and cigarette fell by 0.37% (of which: carbonated beverages decreased by 0.26%, alcohol and beer decreased by 0.5%, smoking decreased by 0.34%); garments, hats and shoes fell by 0.2%; postal services and telecommunications decreased by 0.13%; household appliances declined by 0.05%. Influence of Covid-19 epidemic, the demand for travel and tourism decreased, so culture, entertainment and tourism group went down by 0.03%. Other goods and services decreased by 0.28%. The price index of goods and services groups increased: Transport group increased by 2.29% (making the overall CPI increase by 0.22 percentage points) due to the impact of 3 upward adjustments of petrol and oil price[4] as of February 25th, 2021, March 12nd, 2021 and March 27th, 2021, on the contrary, the prices of some goods decreased according to the rule of returning to the normal price level after the Lunar New Year[5]. Housing and construction materials increased by 0.24%, due to the increase of 0.52% in electricity’s price for a living (making the overall CPI increased by 0.02 percentage points); price of gas increased by 1.37%; prices of housing maintenance materials rose 0.27% and kerosene rose 7.92%. Medicine and medical service group grew by 0.02%, mainly due to changing seasons of weather, the proliferation of viruses causing diseases, people susceptible to respiratory diseases, so the demand for drugs to strengthen the immune system increased. Education group went up by 0.01%.
The average CPI of the first quarter of 2021 increased by 0.29% compared to the same period of 2020. CPI in March 2021 increased by 1.31% over December 2020 and rose by 1.16% over the same period of 2020. CPI of the first quarter of 2021 increased compared to the same period last year due to somemain reasons as follows: (i) Price of domestic rice increased in line with export rice prices and high demand for sticky rice and non-glutinous rice during the Lunar New Year, causing the price of rice in the first quarter of 2021 to increase 8.55% (making overall CPI increase by 0.22 percentage points); (ii) Price of foodstuff products increased by 0.49% (making the general CPI increased by 0.1 percentage points)[6]; (iii) Price of outdoor eating and drinking grew by 2.08% according to the price of food and foodstuff; (iv) Price of domestic gas increased by 7.58% due to fluctuations in the price of world gas; (v) The price of educational services increased by 4.49% due to the impact of the increase in tuition fees for the new school year 2020-2021 according to the roadmap of Decree No. 86/2015/ND-CP.
Besides, there were a number of factors that contributed to curb the CPI of the first quarter of 2021: (i) The Government implemented a series of support packages for people and producers who had difficulties due to the Covid-19 epidemic, of which the support package of Vietnam Electricity (EVN) to reduce electricity prices and electricity bills for customers in the second quarter and fourth quarter of 2020, so the electricity price in January 2021 decreased by 16.88% compared to the previous month, making the price of average electricity for living in the first quarter of 2021 decreased by 7.18% compared to the same period in 2020 (the impact on the overall CPI decreased by 0.24 percentage points); (ii) The price of average domestic petroleum and oil in the first quarter of 2021 decreased by 9.54% over the same period last year (the impact on the overall CPI decreased by 0.34 percentage points) and price of oil decreased by 14.5%; (iii) Due to the impact of the Covid-19 epidemic, the demand for travel and tourism of the people decreased compared to the same period last year, making the price of air tickets in the first quarter of 2021 decreased by 24.28%; train fares fell by 10.03%; price of package travel reduced by 4%; (iv) The Government and the Prime Minister promptly instructed ministries, branches and localities to synchronously and effectively control epidemics, ensure people’s health and maintain socio-economic stability.
Core inflation in March 2021 decreased by 0.12% over the previous month and increased by 0.73% over the same period last year. The average core inflation of the first quarter of 2021 grew by 0.67% compared to the same period of last year.
b) Gold price index and US dollar
Domestic gold prices fluctuated according to the world gold prices due to the support of fiscal stimulus packages along with the recovery of USD and US bond yields, making gold less attractive. The average world gold price as of March 27th, 2021 decreased by 4.77% compared to February 2021. Domestically, the gold price index in March 2021 decreased by 2.97% over the previous month; a decrease of 0.63% compared to December 2020; increased by 16.84% over the same period last year.
The US dollar on the world market increased in the context of Covid-19 vaccination which was widely deployed in the United States; at the same time, from March 12nd, 2021, the US started to deploy a bailout package to reduce the negative effects of the Covid-19 epidemic, stimulating the economy worth 1,900 billion USD. Besides, the US Federal Reserve (Fed) announced to keep the basic interest rate at 0%-0.25% and maintain the bond buying program at least 120 billion USD/month to support the process of economic recovery in the US caused the price of US dollars to increase. 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 March 2021 increased by 0.23% over the previous month; went down by 0.11% compared to December 2020 and dropped 0.7% over the same period of 2020.
c) Producer price index
Producer price index (PPI) for agriculture, forestry and fishery products in the first quarter of 2021 increased by 1.34% compared to quarter IV/2020 and by 4.54% compared to the same period last year, of which the PPI for agriculture products increased by 0.82% and by 6.7%; forestry increased by 0.08% and decreased by 0.07%; fishery grew by 3.08% and reduced by 1.32%.
PPI for industry products in the first quarter of 2021 increased by 1.04% over the quarter IV/2020 and went up by 0.27% over the same period last year, of which the PPI for mining and quarrying increased by 9.47% and declined by 3.25%; manufacturing increased by 1.04% and by 0.59%; production and distribution of electricity, gas, hot water, steam and air conditioner fell by 2.24% and by 1.71%; water supply, sewerage, waste management and remediation activities decreased by 0.02% and increased by 1.54%, respectively.
PPI for services in the first quarter of 2021 increased by 0.01% compared to the quarter IV/2020 and fell by 0.27% over the same period last year, of which accommodation and food service activities increased by 0.69% and 0.05%; education and training services increased by 0.44% and by 3.17%; transport and storage service increased by 0.27% and went down by 2.78%; arts, entertainment and recreation increased by 0.27% and by 0.43%; human health and social work activities increased by 0.14% and by 0.25%; information and communication fell by 0.01% and by 2.05%.
d) Merchandise import and export price index
Merchandise export price index in the first quarter of 2021 increased by 0.75% over the quarter IV/2020 and decreased by 0.3% over the same period last year, of which the price index of agricultural products and foodstuff increased by 1.3% and by 0.57%; fuel group grew by 2.7% and reduced by 19.36%; other manufacturing products grew by 0.6% and by 0.4%. Export price index in the first quarter of 2021 compared to the quarter IV/2020 and the same period last year of some commodities was as follows: Iron and steel grew by 12.05% and by 4.73%; petroleum oil, refined increased by 4.79% and declined by 11.26%; rubber went up by 4.59% and by 1.82%; chemical fertilizers went up by 3.7% and by 2.8%; phones and mobile equipment reduced by 0.94% and by 2.8%; cameras, camcorders and components declined by 0.71% and grew by 1.29%; tea went down by 0.53% and increased by 7.98%; coal reduced by 0.4% and by 1.35%; electrical wire and cable went down by 0.22% and by 1.03%.
Merchandise import price index in the first quarter of this year increased by 1.54% over the quarter IV/2020 and grew by 1.2% over the same period last year, of which import price index of agricultural products and foodstuff increased by 1.28% and by 1.81%; fuel group increased by 12.92% and by 11.5%; other manufacturing products increased by 1.03% and by 0.7%, respectively. Import price indexes in the first quarter of 2021 of some products were as follows: Liquefied petroleum gas increased by 24.57% against the quarter IV/2020 and grew by 1.53% against the same period last year; petroleum oil, refined increased by 14.53% and by 15.14%; chemicals went up by 6.57% and by 2.53%; other base metals grew by 6.49% and by 7.52%; animal fodder and materials went up by 5.54% and by 7.49%; rubber increased by 3.94% and by 5.07%; articles of rubber edged down by 0.75% and by 2.12%; car of all kinds reduced by 0.68% and by 3.27%; chemical fertilizers went down by 0.33% and by 0.84%.
Merchandise term of trade[7] in the first quarter of 2021 decreased by 0.78% compared to the quarter IV/2020 and decreased by 1.49% over the same period last year, of which the merchandise’s term of trade for petroleum oil, refined decreased by 8.5% and 22.93%; chemicals decreased by 6.16% and 2.47%; vegetables and fruits reduced by 1.92% and increased by 0.35%; electronic parts (including TV parts), mobile, computer and their parts edged down by 0.39% and by 1.36%; iron and steel went up by 8.4% and by 0.3%; fishery products grew by 1.13% and reduced by 2.8%; rubber increased by 0.62% and went down by 3.09%; wood and articles of wood increased by 0.48% and by 0.79%.
[1] CPI growth rate in March over the same period last year of period of 2016-2021: 1.69%; 4.65%; 2.66%; 2.7%; 4.87%; 1.16% respectively.
[2] CPI growth rate in the first quarter over the same period last year of period of 2002-2021: 2.95%; 3.82%; 4.23%; 9.07%; 8.31%; 6.58%; 16.37%; 14.47%; 8.51%; 12.79%; 15.95%; 6.91%; 4.83%; 0.74%; 1.25%; 4.96%; 2.82%; 2.63%; 5.56%; 0.29% respectively.
[3] Of which: the price of pork decreased by 3.78% (making the general CPI decrease by 0.13 percentage points) as African swine fever is controlled, pork supplies are guaranteed; prices of processed products from pork decreased (prices of roast meat, spring rolls decreased by 1.37%; other processed meat decreased 0.22%); prices of poultry meat and egg decreased by 1.59% and 2.91% respectively; the price of green vegetables decreased by 5.91%; prices of fresh and processed fruit decreased by 3.28%.
[4] The petroleum price index increased by 6.89% (making the overall CPI grew by 0.25 percentage points).
[5] Prices of road passenger transport decreased by 4.19%; train fares down 12.34%; motorbike and car parking services decreased by 1.88%.
[6] Of which: the price of pork increased by 0.46%, price of beef increased by 2.89%, price of processed meat increased by 3.73%.
[7] Merchandise export price index/ Merchandise import price index.