a) Consumer price index
Rents fell during social distancing; tuition fees for the academic year 2021-2022 are exempt or reduced in some localities; foodstuff prices fell due to guaranteed supply; the implementation of Resolution No. 83/NQ-CP dated July 31st, 2021 of the Government on the plan to support electricity price reduction, the 4th phase of electricity bill reduction for customers affected by the Covid-19 epidemic were the main reasons for the consumer price index (CPI) in September 2021 decreased by 0.62% compared to the previous month, increased by 1.88% compared to December 2020. Compared to the same period last year, CPI in September 2021 increased by 2.06%; average CPI in the third quarter of 2021 increased by 2.51%. In the 9 months of 2021, CPI increased by 1.82% over the same period last year, the lowest increase since 2016[1]. Core inflation in 9 months increased by 0.88%.
The consumer price index (CPI) in September 2021 decreased by 0.62% compared to the previous month, of which: 5 groups of goods and services had a decrease in the price index and 6 groups with an increase in the price index.
(1) Five groups of goods and services that have decreased price indexes include:
– The education group had the largest decrease with 2.89% (making the general CPI decreased by 0.18 percentage points) due to some localities implementing exemption and reduction of tuition fees for the 2021-2022[2] school year n the context of the complicated development of the Covid-19 epidemic, the price index of educational services decreased by 3.35%.
– Housing and construction materials decreased by 1.99% (making the general CPI decreased by 0.37 percentage points) mainly due to the decrease in house rent price by 1.99% (making the general CPI decrease by 0.21 percentage points) to support people during social distancing. In addition, electricity prices decreased in the provinces and centrally-run cities that implemented social distancing following Directive No. 16/CT-TTg, and the weather in the autumn reduced the demand for electricity and water, causing electricity prices for a living decreased by 4.96% (making the general CPI decrease by 0.16 percentage points) and the price of water for a living decreased by 1.66%.
– Transport group decreased by 0.16%, although gasoline and oil prices were adjusted up on September 10th, 2021, and September 25th, 2021, but due to the impact of the decrease on August 26th, 2021, so petrol price index in September 2021 decreased by 0.38%, diesel oil price decreased by 0.39%. Used car prices decreased by 0.74% because dealers faced financial difficulties, so they reduced the prices of many types of vehicles.
– Food and catering services decreased by 0.16% due to abundant supply, of which: Food increased by 0.12%[3]; foodstuff decreased by 0.3%[4]; outdoor eating and drinking increased by 0.04%.
– Postal services and telecommunications decreased by 0.06%, focusing on the price of mobile phones and tablets.
(2) Six groups of goods and services with increasing price index include:
– Beverage and cigarettes had the highest increase with 0.17%, mainly due to cigarette price increase of 0.48% as transportation costs increased and supply was limited[5].
– Household appliances increased by 0.09% due to the demand for refrigerator equipment; computers and accessories; printers, projectors, scanners increased sharply during the period of social distancing (up 0.3%, 0.29%, and 0.46% respectively).
– Medicine and medical service group increased by 0.03% due to the rapid and complicated development of the Covid-19 epidemic, localities speed up vaccination against epidemics, so the demand to buy medicines and medical equipment increases, causing drug prices to increase by 0.11%.
– Garments, hats, and shoes increased by 0.02%.
– Culture, entertainment, and tourism groups increased by 0.01% mainly due to the increase in prices of flowers and ornamental plants by 0.92%.
– Other goods and services increased by 0.02%.
Generally, in the third quarter of 2021, CPI increased by 0.93% compared to the previous quarter and by 2.51% over the same period in 2020, of which transport group increased by 13.68% over the same period last year; housing and construction materials increased by 3.46%; education group increased by 2.31%; beverage and cigarettes increased by 1.9%; food and catering services increased by 0.99%; garments, hats and shoes increased by 0.86%; household appliances increased by 0.62%; medicine and medical service group increased by 0.17%; other goods and services increased by 1.3%. There were 2 groups with a decrease in price index compared to the same period last year: culture, entertainment and tourism group decreased by 0.91%; postal services and telecommunications decreased by 0.86%.
CPI in 9 months of this year increased compared to the same period last year due to several main reasons:
(i) Domestic gasoline prices increased by 24.8% over the same period last year (making the general CPI increase by 0.89 percentage points), gas prices by 21.7% (making the general CPI increase by 0.32 percentage points);
(ii) The price of educational services increased by 3.76% over the same period last year (making the overall CPI increase by 0.2 percentage points) due to the influence of the tuition fee increase for the new school year 2020-2021 according to the roadmap of Decree No. 86 /2015/ND-CP dated October 2nd, 2015 of the Government;
(iii) Rice price increased by 6.47% over the same period last year (making the overall CPI increase by 0.16 percentage points) due to the increase in the domestic rice price in line with the export price of rice, the increased consumer demand during the Lunar New Year and the cumulative demand of the people during the time of social distancing;
(iv) The price of housing maintenance materials increased by 6.3% over the same period last year due to the increase in cement, iron, steel and sand prices in line with the price of input materials (making the overall CPI increase by 0.13 percentage points).
Besides, some factors are contributing to restraining CPI growth rate in 9 months of 2021:
(i) Prices of foodstuff items decreased by 0.29% over the same period last year (making the overall CPI decrease by 0.06 percentage points);
(ii) The Government has implemented support packages for people and producers facing difficulties due to the Covid-19 epidemic such as the support package of the Electricity of Vietnam (EVN) which reduced electricity prices and electricity bills for customers in the second quarter (starting to decrease from May 2020), the fourth quarter of 2020 (to be implemented in January 2021), and reduce electricity prices and electricity bills for people in localities implementing social distancing according to Directive No. 16/CT-TTg in the August/September billing period, the average daily-life electricity price in 9 months of 2021 decreased by 0.99% compared to the same period in 2020 (making the overall CPI decrease by 0.03 percentage points);
(iii) People’s demand for travel and tourism decreased due to the impact of the Covid-19 epidemic, causing airfares to decrease by 20.91% over the same period last year; package tour price decreased by 2.69%;
(iv) All levels and sectors have actively implemented many synchronous solutions to prevent complicated developments of the Covid-19 epidemic and stabilize market prices.
Core inflation in September 2021 decreased by 0.26% compared to the previous month, increased by 0.74% over the same period last year. The average core inflation in the 9 months of 2021 increased by 0.88% over the same period in 2020.
b) Gold price index and US dollar
The world gold price increased due to the weakening of the dollar along with the stock market and financial turmoil in the context of Evergade, China’s largest real estate group facing the risk of default, prompting investors to seek safe assets like gold. The average world gold price as of September 26th, 2021 increased by 0.14% compared to August 2021. Domestically, the gold price index in September 2021 remained stable compared to the previous month; down 1.64% compared to December 2020 and down 2.7% over the same period in 2020.
The US dollar on the world market fell after the US Department of Labor announced an increase in the number of first-time jobless claims in August, adding that countries began to tighten monetary policy, causing the domestic currency to appreciate, pushing the USD down. Domestically, the foreign currency reserve of the State Bank of Vietnam is abundant to meet the foreign currency demand of importing enterprises. US dollar price index in September 2021 decreased by 0.48% compared to the previous month; down 1.14% compared to December 2020 and down 1.35% over the same period in 2020 due to limited demand for foreign currency trading in the context of prolonged social distancing.
c) Producer price index
The world economy will gradually recover in the 9 months of 2021 as countries step up vaccination programs against Covid-19 to achieve herd immunity, and at the same time deploying economic growth stimulus packages and loosening monetary and fiscal policy measures. Domestically, the outbreak of the Covid-19 epidemic along with the social distancing measures from the beginning of the year until now has caused business and production activities to be severely affected. In that context, the producer price index, input producer price index used for production, the merchandise export and import price indexes of goods in 9 months of 2021 all increased over the same period last year. Merchandise term of trade in the nine months of the year decreased by 3.75% over the same period in 2020, reflecting the unfavorable export price of Vietnam’s goods abroad compared to the price of goods imported from abroad to Vietnam.
Producer price index (PPI) for agricultural, forestry and fishery products in the third quarter of 2021 decreased by 2.28% compared to the previous quarter and increased by 0.05% over the same period last year, of which the PPI of agricultural products decreased by 2.45% and 0.57%; forestry increased by 0.07% and by 0.77%; fishery decreased by 2.02% and increased by 1.88%.
In 9 months of 2021, the PPI for agricultural, forestry and fishery products increased by 2.82% over the same period in 2020, of which the PPI of agricultural products increased by 3.52%; forestry by 0.46%; fishery increased by 0.94%.
PPI for industrial products in the third quarter of 2021 increased by 1.12% compared to the previous quarter and 3.71% over the same period last year, of which the PPI of mining and quarrying increased by 3.33% and increased by 18.35%; manufacturing increased by 0.95% and 3.26%; production and distribution of electricity, gas, hot water, steam and air conditioner increased by 2.06% and 2.93%; water supply, sewerage, waste management and remediation activities increased by 0.52% and 1.77%.
In 9 months of 2021, PPI for industrial products increased by 2.44% over the same period in 2020, of which the PPI of mining and quarrying increased by 12.7%; manufacturing increased by 2.18%; production and distribution of electricity, gas, hot water, steam and air conditioner increased by 1.32%; water supply, sewerage, waste management and remediation activities increased by 1.62%.
PPI for services in the third quarter of 2021 decreased by 0.07% compared to the previous quarter and increased by 0.46% over the same period last year, of which the PPI of some industries was as follows: transport and storage service decreased by 2.15% and by 1.78%; accommodation and food service activities increased by 0.05% and by 0.98%; information and communication increased 0.08% and 0.17%; education and training services increased by 0.07% and 2.58%; human health and social work activities increased by 0.44% and by 0.81%; arts, entertainment and recreation decreased by 0.03% and increased by 0.43%.
In 9 months of 2021, PPI for services increased by 0.68% over the same period in 2020, of which transport and storage service decreased by 0.46%; accommodation and food service activities increased by 0.76%; information and communication decreased by 0.33%; education and training services increased by 3.02%; human health and social work activities increased by 0.49%; arts, entertainment and recreation increased by 0.47%.
d) Price index of materials, fuels used for production
The price index of materials, fuels used for production in the third quarter of 2021 increased by 1.36% compared to the previous quarter and by 5.36% over the same period last year, of which the price index of materials, fuels used for agriculture, forestry and fishing increased by 2.27% and 6.3%; used for manufacturing increased by 1.27% and by 5.6%; used for construction increased by 2.4% and 5.35%.
In 9 months of 2021, the price index of materials, fuels used for production increased by 4.87% over the same period last year, of which the price index of materials, fuels used for agriculture, forestry, and fishing increased by 6.66%; used for manufacturing increased by 5.18%; used for construction increased by 3.59%.
e) Merchandise import and export price index
Merchandise export price index in the third quarter of 2021 increased by 1.1% compared to the previous quarter and by 3.72% over the same period last year, of which the price index of agricultural products and foodstuff increased by 0.96% and by 5.69%; fuel group increased by 7.74% and 25.67%; other manufacturing products increased by 0.87% and 2.68%.
In 9 months of this year, the merchandise export price index increased by 2.05% over the same period last year, of which the price index of agricultural products and foodstuffs increased by 3.28%; the fuel group increased by 8.86%; other manufacturing products increased by 1.62%.
Merchandise import price index in the third quarter of 2021 increased by 4.17% compared to the previous quarter and by 9.46% over the same period last year, of which the import price index of agricultural products and foodstuffs increased by 2. 08% and increased by 6.24%; fuel group increased by 2.01% and 38.93%; other manufacturing products increased by 4.39% and 8.38%.
Generally, for 9 months of this year, the merchandise import price index increased by 6.03% over the same period in 2020, of which the price index of agricultural products and foodstuffs increased by 4.36%; fuel group increased by 34.13%; other manufacturing products increased by 4.92%.
Merchandise term of trade[6] in the third quarter of 2021 decreased by 2.95% compared to the previous quarter and by 5.24% over the same period last year. In 9 months of 2021, merchandise term of trade decreased by 3.75% over the same period last year, of which the merchandise’s term of trade for petroleum oil, refined decreased by 16.9%; rubber down 5.93%; vegetables and fruits decreased by 2.65%; electronic parts (including TV parts), mobile, computer and their parts down 1.25%; fishery products decreased by 0.02%; wood and articles of wood down 7.19%; iron and steel increased by 5.47%.
[1] The average CPI growth rate of 9 months inccreased compared to the same period last year in 2016-2021: 2.07%; 3.79%; 3.57%; 2.5%; 3.85%; 1.82%, respectively.
[2] The rate of decline in the price index of educational services in September compared to the previous month of some localities: An Giang decreased by 56.03%; Quang Ninh down 17.49%; Dong Nai down 7.29%; Hanoi decreased by 3.62%; Da Nang down 2.82%.
[3] Mainly because in the month of the Mid-Autumn Festival, the demand for flour, corn, potatoes, and cassava increased sharply, causing the price of flour and other grains to increase by 2.39%; Besides, the price index of processed foods such as vermicelli, pho, rice paper, instant noodles, and the bread also increased by 0.52%. In the opposite direction, rice prices decreased by 0.17% due to abundant supply when localities were focusing on harvesting the summer-autumn crop. Along with that, the complicated development of the Covid-19 epidemic greatly affected the consumption of rice; Vietnam’s export rice prices are falling due to reduced import demand from other countries, high transportation costs, and limited delivery capacity of businesses.
[4] Pork price decreased by 2.52% (making the general CPI decrease by 0.09 percentage points) due to the well-controlled African swine fever in localities, increased pork supply; prices of products processed from pork decreased (prices of roast meat, pork rolls, sausages decreased by 0.59%; animal fat decreased by 3%); the price of fresh poultry meat decreased by 0.28%; the price of eggs of all kinds decreased by 1.13%.
[5] The cigarette product production index in September 2021 was estimated to decrease by 12.7% compared to September 2020, and the 9 months of 2021 decreased by 3.1% compared to the same period last year.
[6] Merchandise export price index/ Merchandise import price index.