Low CPI increase energises economic growth: official

The slower pace of consumer price index (CPI) rises is favourable for stable business activities and gross domestic product (GDP) growth in 2015, said General Director of the General Statistics Office (GSO) Nguyen Bich Lam.

Vietnam has recorded continually low CPI hikes in recent months. The September index slipped by 0.21 percent from a month earlier – the first September decline in a decade – while increasing by only 0.4 percent over last December.

Meanwhile, the country’s GDP grew by 6.5 percent during the nine-month period through September, Lam said, noting that other positive economic indexes also imply that Vietnam’s economy has been flourishing.

As a modest CPI upturn is also conducive to business activities, a CPI augmentation does not necessarily means GDP growth and vice versa, he stressed.

Despite the slow CPI pace, the total retail sales of consumer goods and services during the first nine months of 2015 leapt over 9 percent compared to the same period last year when the figure posted at 7.3 percent, proving a rise in consumer demand.

Lam continued to say that the GDP expansion was also fuelled by development in the mining, processing, and electricity and water production and distribution industries.

Vietnam’s inflation has not surged rapidly in recent years, encouraging ministries and sectors to set the target inflation rate of 5 percent for 2015 and 2016 – a level that could ensure the economy’s stable growth.

The GSO also studied domestic and global economic developments over the past two decades and realised that the best inflation rate for the country’s economic development is between 5 and 8 percent, the General Director said.

He noted that the office recently asked the Government not to include inflation in socio-economic development targets submitted for the National Assembly’s approval, but rather as an objective for the Cabinet to steer the economy.-VNA