According to the HCMC Statistics Office, the city’s CPI in February, the month of the Lunar New Year holiday (Tet) characterized by a spending spree, went down 0.4% against January for the first time in the last six years due to falling prices of fuels and other goods. Consumer prices did not increase at Tet as seen in the previous years thanks to sufficient supply.
In addition, fewer consumers kept the habit of storing food for the biggest holiday of the year, which ended last week.
The office said February’s CPI in big cities like HCMC and Hanoi shrank against January, pushing the country’s CPI down in the month.
Economic expert Ngo Tri Long said the CPI drop for four consecutive months was unusual. The CPI in the Tet month is usually up over the end of the previous year, but it fell this year as lower fuel prices sent prices of other goods down.
On the other hand, demand was quite low as stubborn economic woes led consumers to tighten spending. But Long said deflation was unlikely as the economy is still growing.
He predicted CPI would rise due to the period chosen to calculate the CPI. Moreover, the world’s fuel prices have bounced back and power prices could be adjusted up later this year.
“Data used to calculate the CPI in February was collected until February 15 while the peak time for Tet shopping was from February 16 to 18. Therefore, prices at Tet will reflect the CPI this month,” Long said.
Tran Hoang Ngan, president of the University of Finance and Marketing, shared Long’s view, saying deflation is not in sight as the CPI fall in February did not result from stagnant production or falling aggregate demand.
Ngan said now is the time to ease monetary policy to increase money supply to make it easy for businesses to take out loans to prop up production and turn out competitive products. This is important for local firms to cash in on the new trade pacts Vietnam is expected to sign this year.
Đăng ký: VietNam News