Vietnam: Inflation rises in July
July 29, 2021
Consumer prices increased 0.62% in July over the previous month, picking up from June's 0.19% rise. July's result marked the sharpest increase in prices since February. The result was driven in part by rising prices for food, due to hoarding resulting from Covid-19 social distancing requirements, and transportation, a result of rising oil and gas prices.
Inflation inched up to 2.6% in July, following June’s 2.4%. Annual average inflation fell to 1.8% in July (June: 1.9%).
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.
Author: Stephen Vogado, Economist