Vietnam: Inflation pulls back in February but remains elevated
Consumer prices fell 0.17% month-on-month in February, contrasting January’s 1.23% increase, driven by lower demand following January’s Lunar New Year celebrations.
Inflation declined from 6.4% in January to 5.4% in February, but was still one of the highest rates observed in recent years, likely influenced by the impact of African swine fever on pork prices. Core inflation fell from 3.3% to 2.9%.
Inflation should fall as the year progresses, as temporary factors which have fanned inflation recently fade. The impact of coronavirus on inflation will be complex; while virus-induced supply disruptions could fan price pressures, weaker demand as a result of the outbreak will exert downward pressure on prices.