February’s CPI rise fuelled by strong Tet consumption hinh anh 1The CPI in February grew 0.8 percent from the previous month (Photo: VietnamPlus)

Hanoi (VNA) – While the abundant supplies of goods ahead of the Lunar New Year (Tet) holiday in January helped curb consumer price index (CPI) growth at 0.1 percent, the surged consumption demand during the long holiday made the CPI grow in February.

In February, the CPI grew 0.8 percent from the previous month and 2.64 percent year on year. It increased 0.9 percent from last December.

As a result, the CPI during the first two months of 2019 expanded 2.6 percent from the same period last year, the General Statistics Office (GSO) announced on February 28.

It noted that in February, nine of the 11 groups of main consumer goods and services recorded month-on-month price hikes. Food and food services saw the strongest rise at 1.73 percent, followed by housing fees and construction materials with 0.69 percent. The smallest increase, 0.01 percent, was reported in medicine and healthcare services.

In contrast, prices in education and postal and telecom services dropped 0.47 percent and 0.03 percent, respectively.

February’s CPI rise fuelled by strong Tet consumption hinh anh 2

Food prices “escalate”

In January, CPI edged up 0.1 percent, a slight rise thanks to abundant supply. Consumption demand continued to soar in February due to the long Tet holiday.

Director of the GSO’s Price Statistics Department Do Thi Ngoc said demand for Tet goods began to increase sharply from the “Ong Cong – Ong Tao” (Land Genie and Kitchen Gods) ceremony and lasted through the last day of the old lunar year, which fell on February 4, 2019.

Prices of an array of foods “escalated”, including wheat flour and cereals up 1.73 percent, rice 0.47 percent and processed food 0.53 percent. Others like pork, beef and fresh seafood also saw their prices rise by 1 – 5 percent.

Growing by 2.13 percent, the food group contributed 0.48 percent to the general CPI growth, Ngoc noted.

During the Tet holiday, demand for transport and travel services also shot up, and when supply was unable to meet demand, prices climbed. The price index of public transport services rose 4.4 percent while that of tour packages went up 1.6 percent from January.

February’s CPI rise fuelled by strong Tet consumption hinh anh 3Prices of an array of foods “escalated” in February (Photo: VietnamPlus)

Gold prices up, exchange rates down

The GSO added domestic gold prices fluctuated in line with global prices, rising 1.53 percent month on month to about 36.5 million VND per SJC-branded tael.

Meanwhile, US dollar depreciation, the State Bank of Vietnam’s abundant foreign exchange reserves and businesses’ low demand for foreign currencies at the year’s beginning helped keep the USD/VND exchange rate stable, about 23,260 VND per dollar.

Ngoc said the USD depreciated in the global market because of investors’ concern that the US economy would weaken. The world and the US’s economy would continue facing numerous risks despite signs that the US and China could reach an agreement to end their trade war. Additionally, the US Federal Reserve reiterated the viewpoint of keeping its interest rate stable, adding another contributor to USD depreciation.

The USD has weakened compared to the basket of six key currencies, creating growth momentum for gold. In the international market, gold was traded at 1,322.92 USD per ounce, up 2.02 percent from January.

Ngoc also pointed out other factors affecting gold prices, noting more frequent declines in global stock markets, some big countries’ termination of economic stimulus programmes, bigger economic uncertainties and growing geo-political risks.

Core inflation – which is the CPI excluding food items, energy products and State-managed healthcare and educational services – in February increased 0.48 percent month on month and 1.82 percent year on year. That helped pull core inflation in the first two months up by 1.82 percent from the same period last year.

“In February, the general inflation was higher than the core inflation. This reflects the fact that price fluctuations were mainly due to food price hikes. The two-month core inflation of 1.82 percent shows that monetary policy is still stable,” the official added.-VNA

February’s CPI rise fuelled by strong Tet consumption hinh anh 4