Vietnam’s Consumer Price Index Declines Despite Positive Economic Signs for the Country

Posted by Reading Time: 4 minutes

Hanoi – Vietnam’s consumer price index (CPI) has turned negative after the finish of the Lunar New Year (Tết) holiday, falling 0.05 percent in February from the previous month. This is the first time Vietnam’s CPI has decreased during the Tết holiday, the country’s busiest shopping season of the year. However, there were positive economic signs in other areas, particularly with regards to inflation.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Pre-Investment, Market Entry Strategy Advisory Services

The General Statistics Office of Vietnam (GSO) has reported that the negative CPI growth was the result of the price decreases in three out of 11 of the items in the consumer basket: traffic, housing and building materials, and telecommunications, which decreased 4.41 percent, 0.41 percent and 0.02 percent respectively, compared to January of 2015. A cut in fuel prices from VND1,460 to VND1,900 (US$0.68 to US$0.88) per liter was a major catalyst for the decline in CPI, contributing to the weakest rate of consumer price inflation in the last decade.

The other eight items in the consumer basket saw small price increases, as follows:

  • Food – 0.53 percent
  • Beverages and cigarettes – 0.56 percent
  • Garment, Footwear and Hats – 0.45 percent
  • Household appliances and goods – 0.31 percent
  • Medicine and healthcare – 0.04 percent
  • Education – 0.03 percent
  • Culture, entertainment, and tourism – 0.05 percent
  • Other goods and services – 0.74 percent

Related Link IconRELATED: Understanding Vietnam’s Import and Export Regulations

During the same period, Vietnam’s basic inflation rate edged up 2.4 percent over the first two months of 2015, however it is still in a very manageable area. The State Bank of Vietnam (SBV) has stated that dealing with inflation is its first priority and it will aim to stabilize and develop the national macro-economic environment. Since the high inflation rate of 18.13 percent in 2011, the SBV has implemented a number of strategic solutions focused on curbing the high rate. These actions have lead to continuing declines in inflation over the recent years: 6.81 percent in 2012, 6.04 percent in 2013, and 4.09 percent in 2014. The SBV is targeting to keep inflation under five percent in 2015.

In other positive economic news, according to the Government, the Index of Industrial Production has seen positive movement over the past two months, jumping 12 percent over the same period in 2014. Moreover, the Purchasing Managers’ Index reached 51.7 in February, up marginally from the reading of 51.5 in January – any number over 50 shows that the economy is expanding. Additionally, ANZ reports that February consumer confidence in Vietnam climbed 6.9 points to 142.3, well above the average of 133.3 during the previous year.

To receive a personalized report on Vietnam for your business, please contact


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading Icon-VB


Import and Export: A Guide to Trade in Vietnam

In this issue of Vietnam Briefing Magazine, we provide you with a clear understanding of the current business trends related to trade in Vietnam, as well as explaining how to set up your trading business in the country. We also attempt to give perspective on what will be Vietnam’s place in the Association of Southeast Asian Nations (ASEAN) in 2015, and look at some of the country’s key import and export regulations.

Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.

An Introduction to Doing Business in Vietnam 2014 (Second Edition)
An Introduction to Doing Business in Vietnam 2014 (Second Edition) provides readers with an overview of the fundamentals of investing and conducting business in Vietnam. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, annual compliance, taxation, human resources, payroll, and social insurance in the country.