The increase in the price of food and foodstuff in localities implementing social distancing according to Directive No. 16/CT-TTg was the main reason for the increase of the consumer price index (CPI) in August 2021 by 0.25% compared to the previous month, an increase of 2.51% compared to December 2020 and an increase of 2.82% compared to August 2020. However, in 8 months of 2021, CPI increased by 1.79% over the same period last year, the lowest increase since 2016[1]; core inflation in 8 months increased by 0.9%.

In the increase of 0.25% of CPI in August 2021 compared to the previous month, there were 4 groups of goods and services with an increase in the price index, 4 groups of goods with a decrease in the price index and 3 groups of stable prices.

(1) Four groups of goods and services with increasing price index include:

– Food and catering services had the highest increase with 0.74% (making the overall CPI increase by 0.25 percentage points) because the transportation and distribution of goods followed a stricter process to ensure the requirements of prevention and control of the Covid-19 epidemic, while the demand for food and food storage increases in areas where social distancing is implemented[2]. In which, food increased by 0.69%[3]; foodstuff increased by 0.97%[4]; outdoor eating and drinking increased by 0.19%.

Beverage and cigarettes increased by 0.22% due to high demand for beverage consumption in hot weather and an increase in the price of cigarettes due to increased transportation costs and reduced supply.

The education group increased by 0.04% due to a 0.34% increase in stationery prices.

Medicine and medical service group increased by 0.02% mainly due to the fast and complicated development of the Covid-19 epidemic, localities accelerated vaccination against epidemics, so the demand to buy drugs to strengthen the immune system increased, causing the price of medicines to increase by 0.08%.

(2) Four groups of goods and services that have decreased price indexes include:

Transport group decreased by 0.06% mainly because many auto dealers offered attractive incentive packages and car discounts to stimulate the purchasing power of consumers in the seventh lunar month, making car prices fall[5]; besides, the price of rail transport decreased by 0.37% when the Vietnam Railways reduced the price.

Postal services and telecommunications decreased by 0.05% as prices of smart mobile phones and tablets decreased by 0.16% and smart mobile phone and tablet accessories fell by 0.5%.

Culture, entertainment, and tourism groups affected by the Covid-19 epidemic decreased by 0.03% mainly because the price of cultural equipment decreased by 0.22%; package tours down 0.04%.

Garments, hats, and shoes decreased by 0.03% due to a decrease in consumer demand when localities implemented social distancing to prevent and control the Covid-19 epidemic.

(3) Three groups of goods and services keep prices stable:

Housing and construction materials, in which: electricity price for daily life increased by 0.35% (making CPI increase by 0.01 percentage points) mainly in localities where electricity price reduction was not supported; gas price increased by 2.95%; on the other hand, the price of kerosene fell by 1.71%; rent decreased by 1.7% because many households reduced prices to share difficulties with people and encourage long-term rental in the context of complicated Covid-19 epidemic; price of housing maintenance materials decreased by 0.2%; the price of water for a living decreased by 0.3%.

– Household appliances have stable prices mainly because electronics supermarkets reduced prices of a series of products to stimulate consumer demand in the context of the Covid-19 epidemic, but the demand for these items household consumption increased, causing the price of soap and detergent to increase by 0.11%; insecticide increased by 0.17%.

Other goods and services are also the group that kept the price stable compared to the previous month.

 Core inflation[6] in August 2021 decreased by 0.02% compared to the previous month, increased by 0.98% over the same period last year. Average core inflation in 8 months of this year increased by 0.9% over the same period in 2020.

The domestic gold price fluctuated in the same direction as the world gold price. The world gold price in August 2021 decreased compared to the previous month after the US job market data in July 2021 exceeded expectations. Accordingly, the US dollar appreciated, the stock market rallied and the US government bond yields rose sharply, causing the demand for gold to decrease. The average world gold price as of August 25th, 2021 decreased by 0.9% compared to July 2021. Domestically, the gold price index in August 2021 decreased by 0.49% compared to the previous month; down 1.65% compared to December 2020 and down 3.02% over the same period last year.

The US dollar in the world market rose after the US Department of Labor released the report that the number of jobs in the US in July 2021 increased the most since August 2020. Domestically, the foreign currency reserve of the State Bank of Vietnam was abundant to meet the foreign currency demand of importing enterprises. US dollar price index in July 2021 decreased by 0.44% compared to the previous month; down 0.67% compared to December 2020 and down 0.92% over the same period last year due to limited demand for foreign currency trading in the context of prolonged social distancing.

[1] The average CPI growth rate of 8 months increased compared to the same period last year in 2016-2021: 1.91%; 3.84%; 3.52%; 2.57%; 3.96%; 1.79% respectively.

[2] The growth rate of the price index of food and foodservice groups in August compared to the previous month of some localities: Can Tho increased by 3.99%; Vung Tau increased by 3.22%; Da Nang increased by 2.65%; Binh Duong increased by 2.62%; Hanoi increased by 2.21%; Vinh Long increased by 1.82%; Ho Chi Minh City increased by 1.68%; Dong Nai increased by 1.47%; Ben Tre increased 1.09%.

[3] The price of rice increased by 0.44% due to the increase in consumer demand, reserves for rice and the cost of transporting rice between localities in the complicated situation of the Covid-19 epidemic; the price of flour and other grains increased by 3.98%; price of processed food increased by 0.82%.

[4] Poultry meat price increased by 0.66%; the price of eggs of all kinds increased by 10.28% due to high consumer demand in the context of many localities implementing social distancing and purchasing of enterprises to process salted duck eggs for the upcoming Mid-Autumn Festival; price of fresh seafood increased by 2.24% due to increased transportation and preservation costs and increased consumption and storage demand; the price of fresh, dried and processed vegetables increased by 5.12% due to difficulties in transporting goods, the source of vegetables to retail markets decreased in some localities; price of fresh and processed fruit increased by 0.52% due to the full moon day of the seventh lunar month. In the opposite direction, pork price decreased by 1.81% (making the overall CPI decreased by 0.06 percentage points) due to African swine fever in well-controlled localities, increased pork supply; prices of processed pork products decreased (the price of roast meat, spring rolls decreased by 0.37%; pork fat decreased by 4.13%).

[5] New car prices fell 0.09% and used car prices fell 0.84%.

[6] CPI after excluding fresh food, foodstuff, energy and goods managed by the State including health services and education services.