Vietnam Inflation July 2021

Vietnam

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.

FocusEconomics Consensus Forecast panelists expect inflation to average 2.9% in 2021, which is up 0.1 percentage points from last month’s forecast. For 2022, the panel projects inflation to average 3.7%.


Author:, Economist

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