Vietnam's November living cost rises most in 9 years on pork shortage

Vietnam's consumer price index (CPI) in November saw an increase of 0.96% against the previous month, the highest growth for November in the last nine years, up 3.78% versus the end of 2018 and 3.52% year-on-year, according to the General Statistics Office (GSO). 

Data: GSO. Chart: Ngoc Mai.

This resulted in an increase of 2.57% year-on-year of the CPI in the first eleven months of 2019, the lowest eleven-month growth rate over the last three years. 

The shortage of pork supply directly led to a higher CPI in November, stated the GSO.

Nine out of 11 commodity groups, which are components of the basket for CPI calculation, witnessed month-on-month hikes in prices. Among them, food and catering services posted the sharpest increase of 2.74%.

Other groups that saw their prices increase were housing, water and electricity supply, and construction materials (0.13%); education (0.04%); culture, entertainment, and tourism (0.03%); household equipment and appliances (0.1%); garment, footwear and hats (0.12%); beverages and cigarettes (0.2%); medicine and healthcare services (0.04%); other goods and services (0.16%). 

The two groups that saw their prices down in November were transportation, mainly due to two petroleum price cuts on October 31 and November 15; and post and telecommunications.  

According to the GSO, core inflation in November picked up 0.3% month-on-month, resulting in an increase of 2.18% year-on-year on average in the January – November period, leading to a rise of 1.94% in the first eleven months compared to the same period of 2018. 

Food demand is forecast to increase in December as the Lunar New Year, the country’s biggest festive period, is approaching, according to Bao Viet Securities Company (BVSC). However, BVSC expected the pork price will not surge in December as the government is boosting pork import to avoid shortage in the last month of the year. Besides, the number of culled pigs has plunged significantly since June.

Therefore, it is expected the average CPI in 2019 will be around 3%. Once the African Swine Fever is gone, the CPI will probably stabilize, stated BVSC.

Previously, experts said under favorable conditions, it is feasible for Vietnam to tame inflation at below 4% as targeted in 2019, citing the CPI below 4% and the core inflation rate of under 2% over the past few years as reason. 

Deputy Prime Minister Vuong Dinh Hue has recently said that the government will keep inflation at 3.3%-3.9% this year.

The Vietnam Institute for Economic and Policy Research (VEPR) in its latest annual economic report said the rate is likely to reach 3.5%. 

In 2018, the CPI increased by 3.54% against 2017, below the target of 4% set by the National Assembly.