The price of domestic petroleum, gas increased according to the world fuel price; the rice price increased in line with the exported rice price and the increased consumer demand at the end of the year were factors that made the consumer price index in December 2020 up 0.1% over the previous month and up 0.19% over the same period last year. The average consumer price index of 2020 increased by 3.23% over 2019[1]. The merchandise term of trade of 2020 decreased by 0.74% compared to 2019, reflecting unfavorable Vietnam goods export’s price to abroad compare to imported goods price from abroad to Vietnam.
a) Consumer price index
Consumer price index (CPI) in December 2020 increased by 0.1% over the previous month. 7/11 major groups of goods and services had CPI in December increased over the previous month, of which the transport group had the highest increase of 2.45% due to the impact of 3 upward adjustments of petrol and oil price as of November 26th, 2020, December 11st, 2020 and December 26th, 2020, caused the petroleum price index increased by 6.52% (making the overall CPI grew by 0.23%). Besides, price of motorcycle increased by 0.18%, price of spare parts increased by 0.03% and price of vehicle maintenance services increased by 0.3% due to year-end procurement and repair demand grew. Garments, hats and shoes grew by 0.15% and household appliances increased by 0.01% due to the demand of buying clothes and shoes and using household appliances when the weather turns extremely cold and damaging in the Northern provinces. Beverage and cigarette increased by 0.13% due to the needs of serving Christmas, New Year of the calendar in 2021 and preparing to source for the upcoming Lunar New Year[2]; education group and medicine and medical service group also grew by 0.01%; other goods and services increased by 0.12%. Price index of remained groups decreased: Food and catering services decreased by 0.41% (of which, food rose by 0.43% due to the price of rice increased by 0.64%[3]; foodstuff declined by 0.77%[4]); culture, entertainment and tourism group dropped by 0.1% due to domestic tourism demand stimulus programs offered by tourism companies[5]; housing and construction materials decreased by 0.03%, mainly due to the cold weather in the Northern provinces and coolness in the Southern provinces, the demand for using electricity and water decreased, causing the electricity’s price for living reduced by 1.38%; price of water for living declined by 0.03%, on the other hand, the price of gas rose by 1.87%, the price of materials, the housing maintenance grew by 0.17% and the price of oil rose 9.45%. The postal services and telecommunications remained unchanged.
Generally in the fourth quarter of 2020, CPI increased by 0.22% compared to the previous quarter, and rose by 1.38% compared to the same period of 2019, of which food and catering services grew up by 6.23% compared to the same period of 2019; education rose by 3.82% (education service went up by 4.17%); beverage and cigarette expanded by 1.26%; household appliances increased by 0.79%; medicine and medical service went up by 0.54%; housing and construction materials increased by 0.51%; garments, hats and shoes went up by 0.48%; other goods and services increased by 2.2%. Price index of 3 groups decreased compared to the same period of 2019: transport by 12.82%; culture, entertainment and tourism by 2.28%; postal services and telecommunications by 0.55%.
Average CPI of 2020 increased by 3.23% compared to 2019, met the target below 4% set by the National Assembly; CPI of December 2020 increased by 0.19% compared to December 2019, and was the lowest level in the period of 2016-2020[6]. Average CPI of 2020 increased compared to last year due to following main reasons: (i) The price of food products increased by 4.51% over last year (making the general CPI increased by 0.17%), of which the price of rice increased by 5.14% due to the increase in price of export rice and domestic consumption demand; (ii) The price of foodstuff products increased by 12.28% over last year (making the general CPI increased by 2.61%), of which the price of living weight pig increased by 57.23% (making the general CPI increased by 1.94%); (iii) Price of medicine and medical service grew by 1.35% due to the Covid-19 epidemic in the world was still complicated, so the demand for this product was still high; (iv) The roadmap of increasing tuition fees continued to be implemented in compliance with the Decree No. 86/2015/ND-CP which leaded to the rise of 4.32% in the price of education services group in 2020 compared to 2019.
Besides, there were a number of factors that contributed to curb the CPI of 2020: (i) The price of petroleum and oil decreased by 23.03% over the last year (making the general CPI declined by 0.83%); price of petroleum decreased by 31.21%; price of gas declined by 0.95% due to the influence of price of the world fuel; (ii) The need for travel and tourism of the people decreased due to the impact of the Covid-19 epidemic, causing the package travel service’s price to decrease by 6.24% over last year; freight charge such as trains and airplanes have decreased[7]; (iii) The Government implemented a series of support packages for people and producers who had difficulties due to the Covid-19 pandemic such as the support package of Vietnam Electricity (EVN) to reduce electricity prices and electricity bills for customers, so price of electricity in May and June this year decreased by 0.28% and 2.72% respectively over the previous month; (iv) Authorities at all levels and sectors actively implemented measures to prevent complicated developments of the Covid-19 epidemic, to ensure the balance of supply and demand and stabilize the market.
Core inflation in December 2020 increased by 0.07% over the previous month and increased by 0.99% over last year. Average core inflation of 2020 grew up by 2.31% compared to 2019.
b) Gold price index and US dollar
Domestic gold prices fluctuated according to the world gold prices. The world gold price dropped rapidly in the early days of December after reaching its peak because the Covid-19 vaccine was approved by many countries and the US could soon complemented an economic support package. However, the world gold price increased again in recent days after the US Congress agreed on the economic stimulus package of 900 billion USD. Average world gold price as of December 26th, 2020 decreased by 0.42% compared to November 2020. Domestically, the gold price index in December 2020 decreased by 0.83% from the previous month; an increase of 30.95% over the same period in 2019; on average, the domestic gold price in 2020 increased by 28.05% compared to 2019.
The US dollar on world markets fell after the economic stimulus package was agreed by the US Congress. Domestically, the foreign currency reserve of the State Bank of Vietnam was abundant to meet the foreign currency demand of importing enterprises. The US dollar price index in December 2020 decreased by 0.23% over the previous month and decreased by 0.09% over the same period of 2019; average US dollar price index in 2020 decreased by 0.02% against 2019.
c) Producer price index
Producer price index (PPI) for agriculture, forestry and fishery products in the fourth quarter of 2020 increased by 0.88% compared to the previous quarter and by 7.75% compared to the same period last year, of which the PPI for agriculture products increased by 1.01% and by 11.3%; forestry increased by 0.11% and decreased by 0.1%; fishery rose by 0.56% and reduced by 1.63%. Generally, in 2020, the PPI for agriculture, forestry and fishery products increased by 8.24% over 2019, of which the PPI for agriculture products increased by 11.87%; forestry decreased by 0.19%; fishery went down by 1.29%.
PPI for industry products in the fourth quarter of 2020 increased by 0.1% over the previous quarter and went down by 0.78% over the same period last year, of which the PPI for mining and quarrying decreased by 0.33% and by 10.42%; manufacturing increased by 0.09% and fell by 0.3%; production and distribution of electricity, gas, hot water, steam and air conditioner increased by 0.36% and fell by 1.96%; water supply, sewerage, waste management and remediation activities increased by 0.44% and by 2.38%, respectively. Generally, in 2020, the PPI for industrial products decreased by 0.6% over last year, of which the PPI for mining and quarrying decreased by 8.76%; manufacturing decreased by 0.23%; production and distribution of electricity, gas, hot water, steam and air conditioner decreased by 1.32%; water supply, sewerage, waste management and remediation activities increased by 2.65%.
PPI for services in the fourth quarter of 2020 increased by 0.66% compared to the previous quarter and fell by 1.3% over the same period last year, of which the service producer price indexes (SPPI) of some sectors were as follows: Education and training services increased by 2.03% and by 2.84%; transport and storage service increased by 2.28% and went down by 5%; accommodation and food service activities increased by 0.02% and fell 0.04%; human health and social work activities still unchanged compared to the previous quarter and increased by 0.17% over the same period last year. Generally, in 2020, the SPPI decreased by 0.73% over 2019, of which the PPI of transport and storage service decreased by 5.21%; information and communication fell by 3.24%; accommodation and food service activities increased by 0.8%; human health and social work activities increased by 2.01%; education and training grew by 3.47%.
d) Merchandise import and export price index
Merchandise export price index in the fourth quarter of this year increased by 0.54% over the previous quarter and decreased by 1.3% over the same period last year, of which the price index of agricultural products and foodstuff increased by 2.39% and fell by 0.46%; fuel group grew by 3.72% and reduced by 25.81%; other manufacturing products increased by 0.15% and decreased by 0.32%. Export price index in the fourth quarter compared to the previous quarter and the same period last year of some commodities was as follows: Ores and other minerals grew by 6.02% and fell by 1.07%; cashew nut went up by 5.75% and by 3.2%; petroleum oil, refined increased by 5.21% and declined by 18.81%; rice went up by 4.52% and by 12.21%; crude oil increased by 3.62% and fell by 30.26%; tea went up by 0.24% and by 11.24%; animal fodder and materials decreased by 2.82% and by 1.94%; phones and mobile equipment declined by 1.65% and by 2.51%; coal went down by 0.48% and by 0.51%. Generally, in 2020, the merchandise export price index decreased by 1.32% over 2019, of which agricultural products and foodstuffs decreased by 2.32%; fuel group declined by 27.03%; other manufacturing products decreased by 0.02%. Export price index of 2020 of some commodities was as follows: Crude oil decreased by 31.78%; petroleum oil, refined declined by 19.15%; fishery products reduced by 6.01%; iron, steel declined by 5.68%; tea went up by 10.11%; ores and other minerals grew by 7.43%; rice went up by 4.78%.
Merchandise import price index in the fourth quarter of this year increased by 0.38% over the previous quarter and fell by 0.49% over the same period of 2019, of which import price index of agricultural products and foodstuff fell by 0.23% and increased by 1.05%; fuel group increased by 3.25% and decreased by 0.7%; other manufacturing products increased by 0.28% and fell by 0.56%, respectively. Import price indexes in the fourth quarter of some products were as follows: Liquefied petroleum gas increased by 18.55% against the previous quarter and fell by 7.73% against the same period last year; other base metals went up by 3.47% and decreased by 0.59%; petroleum oil, refined increased by 2.52% and decreased by 0.12%; fishery products grew by 0.56% and reduced by 1.88%; animal or vegetables oil and fats went down by 1.09% and went up by 12.78%; wheat edged down by 0.58% and increased by 2.23%. Generally, in 2020, the merchandise import price index of goods decreased by 0.59% over 2019, of which agricultural products and foodstuffs increased by 0.93%; fuel group decreased by 2.88%; other manufacturing products decreased by 0.56%. Import price index of 2020 of some commodities was as follows: Liquefied petroleum gas decreased by 12.96%; chemicals edged down by 6.89%; other base metal decreased by 3.35%; petroleum oil, refined decreased by 2.65%; articles of paper grew by 10.67%; animal or vegetables oil and fats went up by 9.01%.
Merchandise term of trade[8] in the fourth quarter of 2020 increased by 0.15% compared to the previous quarter and decreased by 0.81% over the same period last year. Generally, in 2020, the merchandise term of trade decreased by 0.74% over 2019, of which the merchandise term of trade for petroleum oil, refined decreased by 16.95%; iron and steel decreased by 5.85%; fishery products reduced by 4.3%; vegetables and fruits decreased by 2.14%; chemicals increased by 7.4%; wood and articles of wood increased by 1.46%; electronic parts (including TV parts), mobile, computer and their parts grew by 0.44%; rubber increased by 0.22%.
[1] Average CPI growth rate in the period of 2016-2020 compared to last year were: 2.66%; 3.53%; 3.54%; 2.79%; 3.23%, respectively.
[2] Prices of alcohol of all kinds increased by 0.14%; beer of all kinds increased by 0.16%; tobacco increased by 0.08%.
[3] Mainly increasing in line with price of export rice due to the need to import rice from other countries and the need to reserve rice at the end of the year (the impact on the overall CPI increased by 0.02%).
[4] Due to the price of pork decreased by 1.65%; price of processed products from pork decreased (price of roast meat, spring rolls decreased by 0.6%, price of animal organs decreased by 0.86%; pork fat reduced by 1.59%); price of poultry meat declined by 0.38%; prices of citrus fruits such as oranges, tangerines and grapefruit decreased by 3.6%; price of fresh vegetable fell by 4.12%.
[5] The price of package travel service decreased by 0.12%; the price of hotels and guest houses went down by 0.11%.
[6] CPI growth rate in December over December last year in period of 2016-2020: 4.74%; 2.6%; 2.98%; 5.23%; 0.19%, respectively.
[7]Price of air ticket decreased by 34.7%; train fares went down by 2.12%.
[8] Merchandise export price index/ Merchandise import price index.