Vietnam: Inflation plunges to lowest level since March in September
Consumer prices fell 0.62% in September over the previous month, contrasting the 0.25% increase seen in August. September’s result marked the weakest reading since April 2020. The decline was broad-based, with reduced price pressures recorded for food, transportation, and housing prices.
Inflation eased to 2.1% in September, following August’s 2.8%. September’s figure marked the lowest inflation rate since March. Accordingly, the trend pointed down slightly, with annual average inflation coming in at 1.7% in September (August: 1.8%).
Despite a strengthening of domestic demand this year, disinflationary pressures will come from falling pork prices as herd sizes continue to recover from the African swine fever outbreak that affected the domestic pig population during the past year. As such, our panelists see inflation averaging slightly lower this year than in 2020 and well below the State Bank of Vietnam’s 4.0% target. However, the recent uptick in Covid-19 cases clouds the inflation picture ahead.