Vietnam Inflation October 2021

Vietnam

Vietnam: Inflation drops to seven-month low in October

October 29, 2021

Consumer prices declined 0.20% from the previous month in October, a softer fall than the 0.62% drop seen in September. Looking at the details of the release, prices for food fell in October. However, prices for transportation rebounded, while education prices returned to growth following the previous month's decline.

Inflation eased to 1.8% in October, falling from September’s 2.1% and representing the lowest inflation rate since March of this year. Annual average inflation was unchanged at September's 1.7% in October.

With a projected pickup in domestic demand penciled in for 2022, inflationary pressures should rise in turn, as consumer spending accelerates and fiscal stimulus remains robust. On the other hand, with the dong set to strengthen slightly in 2022 and monetary policy estimated to tighten throughout the year, price pressures should remain in check, with our panelists forecasting inflation to average below the State Bank of Vietnam’s 4.0% target. The recent outbreaks in Covid-19 cases cloud the inflation considerable, however.

FocusEconomics Consensus Forecast panelists expect inflation to average 3.2% in 2022, which is down 0.5 percentage points from last month’s forecast. For 2023, the panel projects inflation to average 3.6%.


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Vietnam Inflation October 2021

Note: Annual and monthly variation of consumer prices index in %.
Source: General Statistics Office of Vietnam (GSO) and FocusEconomics calculations.


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