Inflation rate continues to fall

Viet Nam’s Consumer Price Index (CPI) has dropped for the second month in succession, preliminary General Statistics Office (GSO) statistics show.

The fall in November was 0.76 per cent against October.

In October, the CPI fell 0.19 per cent. The falls followed 18 months of increases.

The average CPI for the first eleven months of the year was still 23.25 per cent higher than the end of November last year.

Preliminary GSO figures also show that export revenue continued its downward trend of the past three months in November to US$4.8 billion.

The figure was $300 million less than October and $500 million less than September.

Northern prices

Inflation fell despite damage from the historic heavy rain in Ha Noi and neighbouring provinces that doubled and tripled the price of essential food and vegetables.

These rises were offset by a fall of 4.86 per cent in the cost of housing and construction materials; 4.4 per cent for transport and telecommunications and 0.07 per cent for other foods and restaurant services.

Prices for other commodities increased but from just 0.12 per cent to 0.9 per cent.

In HCM City, the CPI fell 0.69 per cent in November, reinforcing the nation-wide decline.

GSO Trade, Services and Prices department director Nguyen Duc Thang said the sharp fall in the price of petrol, oil and construction steel was a major reason for the lower CPI.

Five consecutive reductions had reduced the price of petrol by 12 per cent.

The rice price also tumbled.

The cost of the grain was down VND5,500 per kilo in the domestic market and export five-per-cent-broken rice sold in the Asia market for US$450 per tonne, down 50 per cent against the middle of this year.

Gold in the domestic, market followed the world price down and fell 5.8 per cent.

But the price for the first 11 first months of this year was still 34.5 per cent higher than at the end of November last year.

Nguyen Duc Thang forecasts that with the Lunar New Year (Tet) approaching, the CPI for the final month of the year will increase by about 0.1 per cent making for a year-on-year increase of 22 per cent.

Oil knocks down exports

Economists attributed the fall in export revenue to falling prices for several key exports, especially crude oil.

Crude oil exports fell by $164 million compared with the previous month, to $505 million; rice exports earned $130 million, a drop of $14 million and seafood $460 million, down $14 million.

Garment and textile export revenue was $780 million - unchanged from October but is expected to receive a boost in December when Japan drops its 10 per cent import tax in accord with the Viet Nam-Japan Economic Partnership Agreement.

Footwear defied the trend and increased to $400 million from $396 million.

Still the $58.5 billion earned in export revenue for the first eleven months of the year is just shy of the Government’s $59 billion target.

The cost of imports fell $400 million against October to $5.3 billion.

Automobiles and vehicle parts, steel, paper, computers and electronic components, machines and equipment, plastic materials, milk and dairy products predominated among the imports.

Imports have cost $75.4 billion so far this year, up 38.4 per cent against the first 11 months of last year.

The trade deficit stood at $16.88 billion, equivalent to almost 29 per cent of the country’s total export revenue.

But economists forecast that if exports increase and imports fall further, the trade deficit could fall within the Government target of $19-20 billion.