According to Nguyen Duc Thang, director of GSO's CPI department, the fall in CPI during the last four months broke the normal fluctuation CPI records in the months ahead of the Tet holiday. Normally, CPI records rise in prices during the months leading to the Tet holiday, due to rising consumption of goods.
The GSO expert said that plunging oil prices were the primary factor for falling CPI in February. The domestic oil price dropped nearly 12% in January. Statistics showed that due to the falling oil price, the transport service rates reduced by 4.41% in February compared to the previous month, pushing down the country's CPI. In addition, the prices of goods were more stable than during the previous years' Tet holiday, without huge increases in prices, which also contributed to a low CPI.
Statistics showed that the rates of food and catering services – the group with the highest percentage among 11 major groups of goods and services in the CPI basket – increased only 0.53% this month. The food and catering service rates were 3.65% in February 2011; 2.11% in 2012; 2.28% in 2013; and 1.15% in 2014.
Thanks to the reduction in the oil and gas price, three out of the 11 groups in the calculated basket witnessed declines in the price, including transport dropped by 4.41%, housing and building material down 0.41% and telecommunications down 0.02%. The prices of the groups of restaurants and food service and foodstuff only increased 0.53% and 0.13%, respectively. The beverage and tobacco and garment, hats and footwear groups saw slight rises in prices of 0.56% and 0.45%, respectively. The gold price rose 2.7% while the US$ price reduced 0.2%
Although falling CPI raised concerns about deflation, Planning and Investment Minister said at a government meeting in January that the fall of CPI during the last few months was not sign of deflation, but caused by plunging oil and petrol prices in line with the world price fluctuations.
