The price of input materials increased according to the world price; the increase in the price of electricity and water for a living in line with consumer demand were the main reasons for the consumer price index (CPI) in June 2021 increased by 0.19% compared to the previous month, went up by 1.62% compared to December 2020 and rose by 2.41% compared to June 2020. On average, in the first 6 months of 2021, CPI increased by 1.47% over the same period last year, the lowest increase since 2016[1]; core inflation in 6 months increased by 0.87%.
a) Consumer price index
Consumer price index (CPI) in June 2021 increased by 0.19% over the previous month, of which: 8 groups of goods and services that have increased price indexes, 2 groups of goods and services have decreased price indexes and 1 group kept the price stable. Transport group had the highest increase with 1.07% (making the general CPI increase by 0.1 percentage points) due to the impact of adjustments in petrol and oil prices on May 12nd, 2021, June 11st, 2021 and June 26th, 2021 made petroleum price index increased by 3.45%, diesel oil increased by 4.71%. Housing and construction materials grew by 0.63% (making overall CPI increase by 0.12 percentage points) mainly because the heat waves in the month made the price of electricity and water for a living increase 1% and 0.26% respectively, besides, the price of housing maintenance materials increased by 1.26% according to the price of raw materials, fuel and input materials[2]; price of gas increased by 3.85% due to adjustment of the price of domestic gas; price of kerosene increased by 4.95%. Beverage and cigarettes went up by 0.11% and household appliances rose by 0.1%, mainly due to the hot weather in the summer, which increased the demand for beverages and consumption of items such as refrigerators, air conditioners and electric fans. Education group increased by 0.03%, of which the price of stationery increased by 0.2%. Medicine and medical service group increased by 0.02% due to the hot weather, people are susceptible to respiratory diseases and flu, so the demand for drugs to strengthen the immune system increases, causing the price of medicines to increase by 0.05%. Postal services and telecommunications went up by 0.01%. Other goods and services increased by 0.06%. The price index of two goods and services groups decreased: Food and catering services decreased by 0.13% (making the overall CPI decrease by 0.04 percentage points) due to the decrease in food and foodstuff’s prices when the supply was abundant, of which: Food fell by 0.28%[3]; foodstuff fell by 0.19%[4]; outdoor eating and drinking increased by 0.07%[5]. Culture, entertainment and tourism group affected by the Covid-19 epidemic decreased by 0.08% because the price of package tours decreased by 0.05%, the price of plants and flowers decreased by 2.91%. Particularly, Garments, hats and shoes remained unchanged.
Generally, in the second quarter of 2021, CPI increased by 0.45% compared to the previous quarter and 2.67% over the same period in 2020, of which transport group increased by 18.12% over the same period last year; education group increased by 4.09%; housing and construction materials by 3.24%; beverage and cigarettes by 1.63%; garments, hats and shoes by 0.98%; household appliances by 0.55%; medicine and medical service group by 0.17%; food and catering services increased by 0.15%; other goods and services increased by 1.7%. There were 2 groups with a decrease in price index compared to the same period last year: postal services and telecommunications decreased by 0.82%; culture, entertainment and tourism group decreased by 0.58%.
CPI in June 2021 increased by 1.62% compared to December 2020 and increased by 2.41% over the same period in 2020. The average CPI in the first 6 months of 2021 increased by 1.47% compared to the same period in 2020. CPI in the first 6 months of this year increased compared to the same period last year due to the following main reasons: (i) The price of domestic petroleum and oil increased by 17.01% over the same period last year (making the overall CPI increase by 0.61 percentage points), price of gas increased by 16.51% (making the overall CPI increase by 0.24 percentage points); (ii) The price of educational services increased by 4.47% over the same period last year (making the overall CPI increase by 0.24 percentage points) due to the influence of the tuition fee increase for the new school year 2020-2021 according to the roadmap of Decree No.86/2015/ND-CP dated October 2nd, 2015 of the Government; (iii) The price of rice increased by 6.97% over the same period last year (making the overall CPI increase by 0.18 percentage points) due to the increase in domestic rice prices in line with export prices and high consumer demand during the Lunar New Year; (iv) The price of housing maintenance materials increased by 5.03% over the same period last year due to the increase in the price of cement, iron, steel and sand in line with the price of input materials (making the overall CPI increase by 0.1 percentage points).
In addition, there are a number of factors contributing to restraining the CPI growth rate in the first 6 months of 2021: (i) The prices of foodstuff items decreased by 0.39% over the same period last year (making the overall CPI decrease by 0. 08 percentage points); (ii) The Government has implemented support packages for people and producers facing difficulties due to the Covid-19 epidemic such as the support package of the Electricity of Vietnam (EVN) which has reduced electricity prices and electricity bills for customers in the second quarter (starting to decrease from May 2020) and fourth quarter of 2020 (to be implemented in January 2021), the average price of electricity for the first 6 months of 2021 decreased by 3.06% compared to the same period last year (making the general CPI decrease by 0.1 percentage points); (iii) People’s demand for travel and tourism decreased due to the impact of the Covid-19 epidemic, causing the price of the package tour group to decrease by 2.85% compared to the same period last year; freight rates of means of transport such as trains and planes reduced[6]; (iv) All levels and sectors have actively implemented many synchronous solutions to prevent complicated developments of the Covid-19 epidemic and stabilize market prices.
Core inflation in June 2021 increased by 0.07% over the previous month and by 1.14% over the same period last year. Average core inflation in the first 6 months of 2021 increased by 0.87% over the same period in 2020.
b) Gold price index and US dollar
The price of domestic gold fluctuated opposite to the world gold price. World gold prices fell after the US Federal Reserve (Fed) announced that it is likely to adjust interest rates earlier in 2023 instead of increasing from 2024. The average world gold price as of June 25th, 2021 decreased by 0.67% compared to May 2021. Domestically, the gold price index in June 2021 increased by 1.12% compared to the previous month; increased by 0.23% compared to December 2020 and increased by 12.37% over the same period in 2020.
The US dollar on the world market continued to recover after the FED signaled that it would soon adjust the loosening monetary policy. Domestically, the foreign currency reserve of the State Bank of Vietnam is abundant to meet the foreign currency demand of importing enterprises. US dollar price index in June 2021 decreased by 0.3% compared to the previous month; went down by 0.32% compared to December 2020 and fell by 0.87% over the same period in 2020.
c) Producer price index
The world economy entered the recovery phase; the organization of the Petroleum Exporting Countries and its allies continue to maintain the level of oil production below the world’s demand, which were the main reason for the producer price index of goods and services, input producer price index used for production, the merchandise export and import price indexes of goods in the first 6 months of 2021 all increased over the same period last year. Merchandise term of trade in the first six months of the year decreased by 0.99% over the same period in 2020, reflecting the unfavorable export price of Vietnam’s goods abroad compared to the price of goods imported from abroad to Vietnam.
Producer price index (PPI) for agriculture, forestry and fishery products in the second quarter of 2021 increased by 0.24% compared to the previous quarter and by 3.87% over the same period last year, of which the PPI of agricultural products increased by 0.18% and 4.47%; forestry by 0.55% and 0.73%; fishery increased by 0.41% and 2.4%. In the first 6 months of 2021, the PPI for agriculture, forestry and fishery products increased by 4.23% over the same period in 2020, of which the PPI of agricultural products increased by 5.63%; forestry by 0.3%; fishery increased by 0.48%.
PPI for industry products in the second quarter of 2021 increased by 1.4% compared to the previous quarter and by 3.39% over the same period last year, of which the PPI of mining and quarrying increased by 4.97% and by 25.01%; manufacturing increased by 1.14% and by 2.7%; production and distribution of electricity, gas, hot water, steam and air conditioner by 2.79% and by 2.81%; water supply, sewerage, waste management and remediation activities increased by 0.82% and by 1.53%. Generally, in the first 6 months of 2021, the PPI for industry products increased by 1.82% over the same period in 2020, of which the PPI of mining and quarrying increased by 9.98%; manufacturing increased by 1.64%; production and distribution of electricity, gas, hot water, steam and air conditioner grew by 0.52%; water supply, sewerage, waste management and remediation activities increased by 1.54%.
PPI for services in the second quarter of 2021 increased by 0.01% compared to the previous quarter and by 2% over the same period last year, of which PPI of some industries was as follows: transport and storage service decreased by 0.38% and increased by 3.09%; accommodation and food service activities increased by 0.22% and by 1.27%; information and communication increased by 0.1% and by 0.9%; education and training services increased by 0.04% and by 3.29%; human health and social work activities increased by 0.22% and 0.42%; arts, entertainment and recreation increased by 0.15% and by 0.54%. In general, in the first 6 months of 2021, the service production price index increased by 0.89% over the same period in 2020, of which transport and storage service increased by 0.21%; accommodation and food service activities increased by 0.66%; information and communication decreased by 0.59%; education and training services increased by 3.23%; human health and social work activities increased by 0.33%; arts, entertainment and recreation increased by 0.48%.
d) Price index of materials, fuels used for production
The price index of materials, fuels used for production in the second quarter of 2021 increased by 1.58% compared to the previous quarter and by 4.96% over the same period last year, of which the price index of materials, fuels used for agriculture, forestry and fishing increased by 2.29% and by 7.25%; used for manufacturing increased by 1.56% and by 4.84%; used for construction increased by 2.12% and by 6.42%. Generally for the first 6 months of 2021, the price index of materials, fuels used for production increased by 4.79% over the same period last year, of which the price index of materials, fuels used for agriculture, forestry and fishing increased by 6.83%; used for manufacturing increased by 4.97%; used for construction increased by 3.91%.
e) Merchandise import and export price index
Merchandise export price index in the second quarter of 2021 increased by 1.29% over the previous quarter and by 2.77% over the same period last year, of which the price index of agricultural products and foodstuff increased by 0.93% and by 3.66%; fuel group increased by 9.5% and by 27.29%; other manufacturing products increased by 1.04% and by 1.79%. Export price index in the second quarter compared with the previous quarter and compared with the same period last year of a number of commodities are as follows: Iron and steel increased by 13.8% and by 26.01%; crude oil increased by 11.13% and by 29.99%; petroleum oil, refined increased by 7.66% and by 28.57%; chemical fertilizers increased by 5.25% and by 11.58%; cameras, camcorders and components decreased by 1.41% and increased by 0.3%; cashew nuts went down by 0.18% and went up by 3.95%; rice decreased by 0.02% and increased by 8.98%. Generally in the first 6 months of this year, the merchandise export price index increased by 1.22% over the same period last year, of which the price index of agricultural products and foodstuff increased by 2.1%; fuel group increased by 1.31%; other manufacturing products increased by 1.09%. Export price index in the first 6 months of 2021 of a number of commodities: Iron and steel increased by 14.88%; rice increased by 10.24%; articles of apparel and clothing accessories increased by 9.23%; chemical fertilizers increased by 7.1%; petroleum oil, refined increased by 6.81%; phones and mobile equipment went down by 2.52%; fishery products decreased by 1.57%; electrical wire and cable went down by 0.4%.
Merchandise import price index in the second quarter of 2021 increased by 1.3% compared to the previous quarter and by 3.28% over the same period last year, of which the import price index of agricultural products and foodstuff increased by 1.9% and by 2.85%; fuel group increased by 5.08% and by 31.2%; other manufacturing products increased by 1.09% and by 2.12%. Import price indexes in the second quarter of a number of commodities are as follows: Raw rubber increased by 7.19% compared to the previous quarter and by 12.44% over the same period last year; wheat increased by 7.04% and by 9.93%; iron and steel increased by 6.2% and by 10.99%; petroleum oil, refined increased by 5.42% and by 35.95%; motor vehicles decreased by 0.49% and by 1.46%; chemical fertilizers decreased by 0.47% and by 1.07%; electronic parts (including TV parts), mobile, computer and their parts decreased by 0.33% and increased by 1.49%. Generally, for the first 6 months of this year, merchandise import price index of goods increased by 2.24% over the same period in 2020, of which the price index of agricultural products and foodstuff increased by 2.33%; fuel group increased by 20.95%; other manufacturing products increased by 1.4%. Import price index in the first 6 months of 2021 of the number of commodities: petroleum oil, refined increased 25.11%; liquefied petroleum gas increased by 21.35%; animal fodder and materials increased by 8.71%; raw rubber increased by 8.69%; iron and steel increased by 7.65%; chemicals increased by 5.18%; unassembled and parts for motor decreased by 2.88%; articles of rubber decreased by 2.51%; motor vehicles decreased by 2.37%.
Merchandise term of trade[7] in the second quarter of 2021 decreased by 0.01% compared to the previous quarter and by 0.5% over the same period last year. Generally for the first 6 months of 2021, merchandise term of trade decreased by 0.99% over the same period last year, of which the merchandise’s term of trade for petroleum oil, refined decreased by 14.62%; chemicals decreased by 4.93%; rubber down 3.82%; electronic parts (including TV parts), mobile, computer and their parts went down by 1.34%; fishery products decreased by 1.06%; vegetables and fruits decreased by 0.86%; wood and articles of wood increased by 0.98%; iron and steel increased by 6.71%.
[1] The average CPI growth rate in the first 6 months of the year compared to the same period last year in 2016-2021: 1.72%; 4.15%; 3.29%; 2.64%; 4.19%; 1.47% respectively.
[2] In the group of materials used for construction, raw materials from cast iron, iron and steel in June 2021 increased by 3.78% compared to the previous month and by 15.28% compared to June 2020, an average of the first 6 months of 2021 increased by 9.61% over the same period last year. The proportion of consumption of iron and steel products accounted for 19.58% of the total consumption of housing maintenance materials and accounted for 0.4% of the total consumption of the population, accordingly, the increase in iron and steel prices in June 2021 compared to the previous month made the overall CPI increase by 0.017 percentage points.
[3] The price of rice fell 0.36% because localities across the country finished harvesting winter-spring rice.
[4] The price of pork decreased by 2% (making the general CPI decreased by 0.07 percentage points) due to the complicated development of the Covid-19 epidemic in many localities, many restaurants, eateries, and schools had to close, making the consumption of pork goods decreased while pork supply increased; prices of processed products from pork decreased (prices of roast meat, spring rolls decreased by 0.48%; other processed meat decreased by 0.01%; pork fat decreased by 3.62%); the price of chicken decreased by 0.03%; price of fresh seafood decreased by 0.31%; prices of fresh and processed fruit decreased by 3%. Particularly, the price of fresh, dried and processed vegetables increased by 3.69%.
[5] Outdoor eating increased by 0.03%; outdoor drinking increased by 0.52% due to hot weather, so the demand for drinks increased.
[6] Train fares decreased by 3.41%; airfares reduced by 17.05%.
[7] Merchandise export price index/ Merchandise import price index.