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Economy News
CPI inches up during August
HA NOI � The Consumer Price Index (CPI) in August increased by 0.63 per cent over last month, the General Statistics Office (GSO) announced yesterday.

On aggregate, the CPI was up 5.04 per cent over the same period last year and 10.41 per cent up on the first eight months of last year.

Nguyen Duc Thang, director of the office's CPI department, said the increase after two consecutive months of decline was due to the hike in world petroleum and gas prices of 10 per cent and 8 per cent respectively.

The healthcare and medical sector saw the highest increase of 5.44 per cent, which followed the Government's decision to increase hospital fees by 75-100 per cent from the beginning of this month.

Out of the 11 baskets of commodities measured, housing and building materials, up 2 per cent, was the second highest increase, followed by transportation services, up 1.07 per cent on the affects of the petroleum price hike.

The only decrease was experienced by the foodstuffs and restaurant services sector, down 0.47 per cent because of abundant supply and a bumper harvest in the Song Hong (Red River) and Cuu Long (Mekong) deltas.

The decrease would reduce purchasing power as the items accounted for 40 per cent of the CPI basket.

Month-on-month price increases, ranging from 0.35 per cent to 1 per cent, were recorded for the sectors of beverage and cigarettes, garments and textiles, footwear, household goods and entertainment.

The gold price rose 0.41 per cent while the price of the US dollar decreased 0.15 per cent over last month.

Thang said the CPI would continue to increase as the country came into a peak period of consumption, with the advent of the mid-autumn festival, new school year and Christmas.

"However, the increase would not be high, driving the year-on-year CPI at 6-7 per cent as set by the Government," he said.

Petrol price hike

Nguyen Tien Thoa, head of the Finance Ministry's Price Management Department, said the ministry on Thursday received proposals to increase retail petroleum prices from two businesses, Dong Thap Petroleum Trading Company and Petec Trading and Investment Corporation.

The highest rise was VND1,200 (5.7 US cents) per litre of petrol and VND700-800 (around 3.3 cents) per litre of oil.

The proposal followed a rise in world oil prices, which had caused the businesses to suffer losses. The price of A92 petrol in Singapore, which provided most of the petrol for Viet Nam, rose US$125.35 a barrel on Wednesday while the price of oil, $131.97 a barrel.

Tran Ngoc Nam, deputy general director of the Viet Nam National Petroleum Corporation (Petrolimex), said the Basic Fuels Price (BFP) of petrol was VND1,000 (4.7 cents) per litre higher than the retail price.

Nam said businesses had suffered losses of VND970-1,100 (around 4.7 cents) per litre of petrol and VND450-500 (around 2.3 cents) per litre of oil.

He said the ministry had been considering the proposed prices.

He added that the ministry should reduce import taxes by 2-3 per cent to support consumers. The current tax on petrol was 12 per cent while that on oil was 10 per cent.

Economist Ngo Tri Long said the proposal to increase retail prices was acceptable as the world price had surged.

However, the ministry should calculate a suitable increase as businesses had big inventories and people had reduced spending, he said.

He added it was the time to slash import taxes to reduce retail petrol prices.

Economist Nguyen Minh Phong said the ministry should make a decision soon to avoid stockpiling at petrol stations to take advantage of a price rise.

Thoa said all taxes had been set under regulations, and difficulties with consumers had been shared.

He said the current tax of 12 per cent was lower than the maximum of 20 per cent.

He added that statistics from the ministry showed that in the first six months of the year, petrol imports were reduced 21 per cent in terms of amount and 13 per cent in price, reducing the return to the State budget by VND1.2 trillion ($57 million). — VNS

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