Rising health service prices contribute to 0.28-percent CPI increase

Pork price in August rises 0.89 percent month-on-month, while CPI increases 0.04 percent (Illustrative photo: VNA)

Hanoi (VNA) – In the first eight months of the year, the overall inflation was higher than the core inflation. This reflected that the price fluctuations were mainly due to the hike in prices of food, foodstuff, gasoline, health and education services.

The consumer price index (CPI) in August rose by 0.28 percent over the previous month, 1.87 percent compared to December 2018, and 2.26 percent over the same period last year. In the first eight months, the CPI was up 2.57 percent year on year, the lowest increase in the recent 3 years (3.84 percent in 2017 and 3.52 percent in 2018), said a report by the General Statistics Office on August 29.

According to Director of the GSO's Price Statistics Department Do Thi Ngoc, “the increased prices of health and education services in accordance to the roadmap to approach market prices, impact of African swine fever, and prolonged hot weather in some localities were the factors leading to the month’s CPI rise.

Prices of eight commodity groups increase

Compared to the previous month, eight out of 11 groups of consumer goods and services in the CPI calculation basket tended to climb, with the highest hike recorded in the prices of medicine and medical services with 2.81 percent and the lowest rise in the beverage and tobacco group, 0.03 percent. However, three groups of commodities saw price reductions, namely transport, down 0.46 percent; culture, entertainment and tourism services, 0.06 percent; and post and telecommunication services, 0.05 percent.

Ngoc also pointed out a number of reasons affecting the CPI in the month. On the market, pork supply decreased due to the impact of African swine fever (as of August 20, around 4.4 million pigs with a total weight of about 255,505 tonnes were culled), causing the August pork price to increase by 0.89 percent over the previous month, adding 0.04 percent to the country’s overall CPI growth.

In addition, the increased prices of medical services (according to Circular No. 13/2019/TT-BYT and Circular No. 37/2018/TT-BYT of the Ministry of Health) made the price index of this group up 3.64 percent, contributing 0.14 percent to the overall CPI increase.

The tuition fee adjustment of some provinces and cities for the new school year 2019-2020 according to the schedule of Decree No. 86/2015/ND-CP, plus persistent scorching heat in some localities that resulted in higher demand for electricity and water, caused the electricity price index to increase 0.33 percent and the water price index 0.28 percent compared to July.

Gold prices soar 4.61 percent

The US Federal Reserve (FED) decided to lower the basic interest rate by 0.25 percent from 2.25 percent to 2 percent (on July 31), marking the first time the body has reduced the USD interest rate since December 2008.

Besides, the US-China trade war continues to directly affect the domestic exchange rate when the dollar strengthens and the yuan weakens. However, with the management policy based on the central exchange rate mechanism of the State Bank of Vietnam with eight key currencies, along with abundant foreign exchange supply, the USD/VND exchange rate in the domestic market did not fluctuate sharply. Specifically, the exchange rate in August only decreased by 0.17 percent, with the average price in the free market of about 23,270 VND per USD.

In the global market, gold prices increased sharply due to geopolitical uncertainties in the Middle East, US-China trade tensions and Vietnamese dong devaluation. As of August 24, the average world gold price rose by 5.46 percent compared to July. In the domestic market, the gold price fluctuated according to the international trend and was up 4.61 percent compared to the previous month, hovering around 40.9 million VND per tael of SJC gold.

Ngoc said that the core inflation (CPI after excluding food, energy and state-controlled commodities including health and education services) this month increased by 0.13 percent month-on-month and 1.95 percent as compared to one year earlier. In the first eight months, the core inflation rose by 1.9 percent year-on-year.

“On average, in the eight-month period, the overall inflation was higher than the core inflation. This reflected that the price fluctuations were mainly due to the increase in food, foodstuff, gasoline, health and education services. The 1.9 percent hike shows that the monetary policy remains stable,” she said./.

(Source: VietnamPlus)