Vietnam: Inflation decreases in December
Consumer prices fell 0.18% from the previous month in December, contrasting the 0.32% rise logged in November. Looking at the details of the release, while prices for food increased in December, prices for transportation and housing both fell after growing in the previous month and healthcare costs grew at a more subdued pace.
Inflation edged down to 1.8% in December, following November’s 2.1% and thus ended the year at its joint-lowest level since march. Meanwhile, annual average inflation rose marginally to 1.8% in December from 1.7% in November.
With a projected pickup in domestic demand penciled in for 2022, inflationary pressures should rise in turn, as consumer spending accelerates and fiscal stimulus remains robust. On the other hand, with the dong set to strengthen slightly in 2022 and monetary policy estimated to tighten throughout the year, price pressures should remain in check, with our panelists forecasting inflation to average below the government’s 4.0% target. The recent outbreaks in Covid-19 cases cloud the inflation outlook considerably, however.