High material, fuel prices send June CPI up 0.19 percent hinh anh 1The Consumer Price Index (CPI) rose 1.47 percent year-on-year in the first half of 2021. (Photo: VietnamPlus)

Hanoi (VNA) – The Consumer Price Index (CPI) rose 1.47 percent year-on-year in the first half of 2021, the lowest since 2016, according to the General Statistics Office (GSO).

The June index edged up 0.19 percent month-on-month, 1.62 percent against last December and 2.41 percent year-on-year.

The rise is largely due to increases in the prices of input materials, fuels, electricity and fresh water, said Nguyen Thu Oanh, director of the GSO’s Price Statistics Department.

The average fuel price in the first half of this year surged 17.01 percent year-on-year, pushing the CPI up 0.61 percentage point, while rice prices grew 6.97 percent, contributing to a rise of 0.18 percentage point in the CPI.

Prices of construction materials such as cement, iron, steel, and sand jumped 5.03 percent, adding 0.1 percentage point to the CPI.

In contrast, H1 prices of food declined 0.39 percent from the same period last year, contributing to a 0.08-percentage-point slide of the six-month CPI. It is because of drops in prices of staples, for example pork (down 4.15 percent) and chicken (down 2.04 percent).

A decrease of 3.06 percent in the electricity price in H1 also pushed the CPI down 0.1 percentage point.

The resurgence of the COVID-19 pandemic has been curbing travel during the first six months of the year, causing train tickets and airfares to fall 3.41 percent and 17.05 percent, respectively.

The average gold price spurred 18.06 percent year-on-year between January and June.

Meanwhile, the US dollar exchange rate in June declined 0.3 percent compared to the previous month, making the six-month figure down 0.85 percent.

Oanh said that core inflation in June inched up 0.07 percent compared to May and 1.14 percent from the same period last year. The figure in the first half of the year rose by 0.87 percent year-on-year. Both June and six-month figures are the lowest since 2011.

If Vietnam could control inflation cautiously and proactively, the CPI for the whole of 2021 would rise by below 3 percent, according to Le Quoc Phuong, former deputy director of the Industry and Trade Information Centre under the Ministry of Industry and Trade.

Regarding H1 low inflation, economist Ngo Tri Long said: “It is a favourable condition to create room to control inflation for the whole year within the target.”

“However, Vietnam should not lose focus as inflation pressure will continue to increase from now to the end of the year. The prices of input materials increased sharply by 4.79 percent in the first half, marking the highest since 2013.”

Nguyen Ba Minh, director of the Institute of Financial Economics, predicted average CPI in 2021 would be at 2.5 percent, 0.3 percentage point higher than that in 2020, forecasting the prices of some essential goods will cool down, market prices be stablised and fluctuations prevented.

Nguyen Duc Do, deputy director of the Institute of Economics and Finance, said that weak aggregate demand due to the pandemic was the basic reason of the low inflation in Vietnam in the context of high prices of basic commodities globally.

According to him, the target of keeping the average inflation to below 4 percent in 2021 will certainly be reached.

Do said if the price growth is kept for the rest of the year at about 0.27 percent each month, the inflation over the same period last year will increase from the current 2.41 percent to 3.2 percent in December and the average inflation for the whole year will be at 2.12 percent.

If the gasoline prices continue to rise sharply and CPI to increase by an average of 0.5 percent per month, inflation by December 2021 will be at 4.71 percent and the average inflation, 2.53 percent, he added./.