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Deputy Director General of the General Statistics Office Nguyen Trung Tien

According to the General Statistics Office, the consumer price index (CPI) in April 2021 fell by 0.04%, but since the beginning of the year, the prices of many kinds of goods and raw materials have increased. Could you please explain this?

The General Statistics Office announced the CPI in April 2021 declined by 0.04% from March, rose by 1.27% from December 2020, and jumped by 2.7% year-on-year. The CPI in the first four months of 2021 rose by 0.89% on average. This result truly reflects consumer price movements in the market.

The monthly CPI is calculated based on information collected from about 40,000 price survey points from 63 provinces and cities under the Central Government for 752 kinds of goods and services most used by people and suitable with current household consumption structure.

Among 11 commodity and service categories at level 1, four categories saw price decreases in April 2021 from March, six categories saw price increases, and onlythe category of apparel, hats and footwear maintainedprices. Thus, the CPI in April 2021 fell by 0.04% from March 2021.

Of total consumption, four groups with price decrease accounted for 60.1%, six groups with price increase saccounted for 34.2% and the group of apparel, hats and shoes with unchanged prices accounted for 5.7 %. Therefore, the overall price index fell compared to the previous month.

Could you tell us more about the current method of CPI calculation?

The current method of CPI calculation is the method which has been applied since 1995 in accordance with the guidance of the International Labor Organisation (ILO), which is also the standard applied by most countries and performed under the latest ILO’s CPI Manual issued in 2020.

Therefore, the CPI calculation method of the General Statistics Office closely reflects consumer price movements in the market and ensures comparability with other countries across the world as well as the region.

The International Monetary Fund (IMF) annually sends experts to Vietnam to review and evaluate information sources, calculation method, representative categories and weighted averages used to calculate CPI according to international standards and practices.

Other international organisations such as the United Nations Statistics Office (UNSD), World Bank (WB), and Asian Development Bank (ADB) all use the GSO's CPI data in their reports and assess Vietnam's CPI calculation method is consistent with international practices.

How do you assess Vietnam's inflationary pressure in 2021, in the context that experts say the world is about to face an inflation wave?

Vietnam's average CPI in the first four months recorded a 0.89% year-on-year increase- the lowest rate since 2016, which is a favourable condition to curb inflation for the whole year 2021 at the target set by the National Assembly. However, we are not subjective because inflationary pressure in 2021 still exists and will increase gradually from now to the end of the year.

The CPI will gradually increase due to a number of key factors such as: international organisations have made positive forecasts about the global economic outlook for this year due to the implementation ofCovid-19 vaccination programme which has been deployed worldwide.

In the country, businesses are also adapting to a new normal state, production and trading activities and services are growing again and the demand for capital, raw materials and fuels is increasing. When the economy restores, the demand for goods and services will increase, pushing the price and putting pressure on inflation for all of 2021.

Along with that, the price of raw materials in many fields in the world has increased sharply, the import of raw materials at high prices will affect production costs, pushing up domestic consumer goods prices.

Currently, the world’s oil prices are still complex. The Brent oil average price in the first four months hit about US$62 per barrel, up nearly 24% from December 2020 and from 49% year-on-year.

The average Brent oil price in 2021 is forecast to reach about US$60 per barrel, an increase of 40% compared to 2020. Thus, the average domestic petrol and oil price this year may jump by 25%, which will make the year’s CPI to go up by 0.9 % compared to 2020.

At the same time, the continued easing monetary policy by countries for economic recovery creates a demand-pull factor that will push up goods prices. In addition, price management of some State-managed items according to the roadmap like health services and education will also affect the consumer price index this year.

With that pressure, can we achieve the target of controlling inflation at 4% set by the National Assembly?

In this context, sectors and agencies should not be subjective in inflation control. To reduce inflationary pressure by the end of 2021 and sustainably control inflation in 2022, authorities must closely monitor supply and demand movements, and market prices of essential commodities; take the initiative in controlling prices of State-managed items; the Ministry of Industry and Trade and Ministry of Finance closely monitor world’s petrol and oil prices, uses the petroleum price stabilisation fund reasonably to limit the price increase of this commodity that affects the general CPI.

4% inflation target set for 2021 within reach: experts Vietnam is likely to meet its target of reining in inflation at a rate of below 4% ...

Learning from the Government's experience in inflation control in recent years, I believe that the average CPI target of about 4% this year set by the National Assembly is feasible.