Inflation in April may exceed expectations

The increase in the consumer price index this month may exceed earlier predictions of 0.2 percent, according to the Ministry of Trade.

The ministry said that inflation in April would be affected by both domestic and international factors. Global oil prices have risen by 7.4%. The price of food and other basic commodities like rice, coffee, rubber, and steel were also following fuel's upward trend, placing strong pressures on the domestic market.

Severe weather conditions have affected agricultural production, and electricity shortages have affected the productivity and quality of some industries. These and other factors were likely to drive up the prices of some products on the domestic market including rice, food products and building materials.

Looking at CPI trends for the year, experts have expressed diverging opinions.
Some believe that inflation will be stabilised by the lower prices of many imported goods brought about by the nation's accession to the WTO.

Others say that CPI will continue to go up as raw materials' prices increase.

The emerging facts have tended to support the latter view. While the import duty on many imported goods, including cosmetics, garments, household goods and confectionery has been reduced 20-30%, the costs of energy and raw materials on the international market have been outstripping any savings to consumers.

In the first quarter of this year, inflation rose 3.02%, compared to 2.8% in the first quarter of last year.

Costs of housing and building materials in the first quarter increased 4.89%, while food costs rose 4.56%. Other categories of goods increased from 0.45% to 3.46%.
The first quarter saw the CPI in urban areas fall 0.51%while the CPI in rural areas rose 0.02 %.

Source: VNA mekong capital equity vinacapital