Inflation increased by 4.16% in 2023

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In 2023, the world commodity market was volatile and influenced by economic, political and social factors. The military conflict between Russia and Ukraine continued along with increasing instability in the Middle East. Many countries maintained tight monetary policies, weak aggregate demand, and slow economic growth, while the financial, monetary, and real estate markets had many potential risks in some countries. Extreme weather conditions occurred in many places, prolonged droughts on a large scale, storms and floods, and natural disasters in many countries caused imbalance in food production and consumption. Global inflation from the beginning of the year until now has tended to decrease gradually after countries simultaneously raised interest rates to curb inflation along with falling energy prices.

​But according to Ms. Nguyen Thi Huong, Director General of the General Statistics Office, compared to the long-term goal, the current inflation level was still high for many countries. US inflation in November 2023 increased by 3.1% over the same period last year, the US Federal Reserve (FED) decided to keep the basic interest rate unchanged at 5.25% -5.5% in many consecutive months to bring inflation to the target level. In November 2023, inflation in the Euro area increased by 2.4% over the same period last year; France increased by 3.5%; Germany increased by 3.2%. In Asia, Laos' November 2023 inflation increased by 25.24%; India increased by 5.55%; Philippines increased by 4.1%; South Korea increased by 3.3%. Vietnam continued to be in the group of countries that control inflation well when the CPI in December 2023 increased by 3.58% compared to December 2022.

Domestically, the Government and the Prime Minister have had proactively, drastically and closely directed ministries and branches to implement many solutions to remove difficulties, promote growth, maintain macroeconomic stability, control inflation, ensure major balances of the economy.

Many solutions were actively implemented such as: reducing lending interest rates, stabilizing the foreign exchange market; promote disbursement of public investment capital; deploying credit packages to support industries and fields; reducing value added tax on some groups of goods and services from 10% to 8% from July 1, 2023; reducing environmental taxes on jet fuel; exempting, reducing, extending taxes, fees, land use fees to support enterprises; extending visa for tourists; removing difficulties and obstacles in the corporate bond and real estate markets; paying attention to social security work.

Accordingly, the market for essential goods had no unusual fluctuations, supply is guaranteed, commodity prices increased and decreased alternately. On average, in 2023, CPI increased by 3.25% compared to 2022; Core inflation increased by 4.16%.

Some localities increased medical service prices according to Circular No. 22/2023/TT-BYT, increased tuition fees according to Decree No. 81/2021/ND-CP, and household electricity prices increased due to the regulation of Vietnam Electricity Group on adjusting the average retail electricity price and domestic rice prices continuing to increase according to export rice prices which are the main reasons why CPI in December 2023 increased by 0.12% compared to the previous month.

Compared to the same period last year, December CPI increased by 3.58%, average CPI in the fourth quarter of 2023 increased by 3.54% and average CPI in 2023 increased by 3.25%, reaching the target set by the National Assembly.

CPI months of 2023 compared to the same period last year. Source: GSO

Specifically, compared to the previous month, CPI in December 2023 increased by 0.12% (urban areas increased by 0.04%, rural areas increased by 0.2%). There were 10/11 main groups of consumer goods and services whose December price index increased compared to the previous month. In particular, the group of drugs and medical services in December 2023 increased by 2.15% compared to the previous month, causing the general CPI to increase by 0.12%. The main reason is due to localities implementing new medical service prices according to Circular No. 22/2023/TT-BYT dated November 17, 2023 of the Ministry of Health.

On the contrary, the traffic group in December decreased by 1.88% compared to the previous month, mainly due to the impact of domestic gasoline price adjustments, causing the gasoline price index to decrease by 5.31%; Diesel price index decreased by 7.61%.

Compared to the same period last year, CPI in December 2023 increased by 3.58%. Of the 11 main consumer goods groups, 10 groups increased prices, especially the postal and telecommunications group decreased by 1.36% due to falling prices of fixed and mobile phones. In 2023, the average CPI increased by 3.25% compared to 2022, reaching the target set by the National Assembly.

Regarding inflation, core inflation in December 2023 increased by 0.17% over the previous month, up 2.98% over the same period last year. On average in 2023, core inflation increased by 4.16% compared to 2022, higher than the general average CPI increase (up 3.25%). The main reason is that the average domestic gasoline price in 2023 decreased by 11.02% compared to the previous year, the gas price decreased by 6.94%, which was a factor that restrained the growth rate of CPI but belonged to the group of goods excluded from the list of core inflation calculator.