Generally, the price’s level of this year increased quite high compared to the same period last year, since January increased by 6.43%, affecting the price management and administration in 2020, leading to inflation control following the target below 4% set by the National Assembly facing many difficulties and challenges. However, with the drastical direction and management of the Government, the Prime Minister, coordination of ministries, line ministries and provinces, the growth rate of consumer price index (CPI) is monthly controlled with the trend of gradually decrease. The average CPI in 2020 increased by 3.23% over the previous year, reaching the target of controlling inflation, keeping the average CPI in 2020 below 4% set by the National Assembly in the context of a year with many unpredictable fluctuations. CPI of December/2020 increased by 0.19% compared to December 2019, was the lowest level in the period of 2016-2020[1].

Average CPI growth rate in 2020 (%)

An increase of average CPI in 2020 compared to the last year due to a number of main reasons as follows: (i) The price of food products increased by 4.51% over the last year (making the general CPI increased by 0.17%), of which rice price increased by 5.14% due to an increase in the 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% resulting from the lack of supply (making the general CPI increased by 1.94%), accordingly, the price of processed pork increased by 21.59%, pork fat increased by 58.99%, in addition, the impact of storms and floods in the central provinces in October and November, vegetables and crops was heavily flooded, many ponds, lakes, barns were damaged, swept away,… causing the price of fresh, dried and processed vegetables to increase; (iii) Price of medicine and medical service grew by 1.35% because the Covid-19 epidemic in the world is still complicated, so the demand for this product is still high; (iv) Continue to implement the roadmap of increasing tuition fees in compliance with the Decree No. 86/2015/ND-CP leading to a rise of 4.32% in the price of education services group in 2020 in comparison with that in 2019.

Besides, there were a number of factors that contributed to curb the CPI of 2020: (i) The price necessary products such as petroleum and oil decreased by 23.03% over last year (making the general CPI declined by 0.83%); the price of oil decreased by 31.21%; price of domestic gas declined by 0.95% due to the influence of the world’s fuel price; (ii) Demand for travel and tourism of people decreased because of the Covid-19 pandemic, causing the package travel service’s price to decrease by 6.24% over the last year; freight charge such as trains and airplanes have decreased[2]; (iii) The Government implemented a series of support packages for people and producers who had difficulties affected by the Covid-19 pandemic such as the support package of Electricity of Vietnam (EVN) to reduce electricity prices and electricity bills for customers, resulting to the 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 solutions to prevent complicated evolvement of the Covid-19 pandemic, 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 the last year. Average core inflation of 2020 went up by 2.31% compared to that in 2019.

[1] CPI growth rate in December over the same period last year during 2016-2020: 4.74%; 2.6%; 2.98%; 5.23%; 0.19%, respectively.

[2] Price of air ticket decreased by 34.7%; train fares went down by 2.12%.