Photo credit: saigontimes
Vietnam’s inflation has been negative for four months, but economists said the downward trend is not worrisome, expecting consumer prices to rebound this month.
Economist Ngo Tri Long was quoted as saying in news website Saigon Times on Sunday that it was unusual that the consumer price index CPI had fell for four months in a row.
However, as the economy is still growing, the risk of deflation is unlikely at the moment, Long said.
He said CPI was down 0.05 percent in February due to drops in fuel costs.
Another reason, he said, was that Vietnamese people were still tightening their purse strings as the economy has yet to fully recover.
The index, however, will likely pick up this month, albeit at a low rate, as world fuel prices are increasing, and local power prices are being considered for adjustment, he said.
Moreover, the February CPI was compiled from statistics recorded as of February 15, before Vietnam’s biggest holiday and shopping season, the Tet holiday, peaked in the second half of the month.
So the real picture will become clearer in this month’s index, according to Long.
Tran Hoang Ngan, member of a financial advisory council to the government, agreed, saying that deflation is yet to emerge in Vietnam, as CPI did not go down due to sluggish production or decreases in demand.
Vietnam’s CPI fell 0.27 percent month-on-month in November, 0.24 percent in December, and 0.2 percent last month, according to the General Statistics Office.