Vietnam: Inflation declines to lowest level since March in June
June 29, 2021
Consumer prices increased 0.19% over the previous month in June, accelerating from May's 0.16% increase. June's figure was the sharpest increase in prices since February. Looking at the details of the release, prices for food and beverages were broadly unchanged in June, while prices for transportation rose.
Inflation came in at 2.4% in June, down from May’s 2.9%. June's reading marked the weakest inflation rate since March. Meanwhile, the trend was unchanged, with annual average inflation coming in at May's 1.9% in June.
Looking ahead, despite a strengthening of domestic demand this year, disinflationary pressures will come from falling food costs, particularly 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.
Author: Stephen Vogado, Economist