According to data released by the General Statistics Office, the consumer price index (CPI) increased by 0.01% in May 2023 compared to the previous month. The main reason is the increase in food and grocery prices, as well as the increase in electricity and domestic water prices due to the ongoing heat.

In May 2023 compared to December 2022, the consumer price index increased by 0.4% and compared to the same period last year by 2.43%. On average, the CPI increased by 3.55% in the first five months of 2023 compared to the same period last year; Core inflation rose 4.83%.

Among the 11 main groups of consumer goods and services, prices for 8 groups of goods increased compared to the previous month and for 3 groups prices decreased.

Among the index-rising groups, housing and building materials increased the most at 1.01%, mainly due to prolonged hot weather, leading to an increase in people’s electricity demand; The gas price increased by 0.31% this month compared to the previous month as from May 1, 2023 the domestic gas price increased by 2,000 VND/12kg-bottle after the world gas price increased by 5 USD/ton (from 550 USD /ton) had increased USD/ton). USD/ton to USD 555/ton).

In turn, due to the impact of price adjustments on May 4, 2023, May 11, 2023 and May 22, 2023, the price of kerosene decreased by 5.93% compared to the previous month; Home maintenance material prices slipped 0.15% on falling steel prices, while iron ore prices fell in the global market.

The culture, entertainment and tourism group rose 0.24% month-on-month, with package tour service prices rising 0.67%; Guesthouses and hotels rose 0.38% as April 30-May 1 saw a long vacation and increased travel demand.

Food and catering services rose 0.24%, bringing headline CPI up 0.08 percentage points; with groceries up 0.29%, resulting in a 0.01 percentage point increase in CPI; Grocery rose 0.22%, pushing the headline CPI up 0.05 percentage point; Eating out grew 0.26%, leading to a 0.02 percentage point increase in CPI due to the hot weather and extended public holidays on April 30 and May 1, boosting consumer demand.

The group of other goods and services increased by 0.23%, mainly focused on personal goods, which increased by 0.46%; Personal care products rose 0.33%; personal service increased by 0.29%; Hospitality services rose 0.22%.

Appliances and home appliances group rose 0.16% due to the hot weather, boosting consumer demand. The prices for air conditioners rose by 0.61% compared to the previous month; Electric Fan Price Up 0.41%; egg beater, multifunction mixer up 0.87%; Blenders and juicers rose 0.01% and large motorized household appliances rose 0.2%.

Beverages & Tobacco rose 0.13% due to the hot and humid weather, leading to an increase in demand for beverage consumption, namely: bottled water price increased by 0.16% month-on-month; carbonated soft drinks by 0.14%; Juice rose 0.47%. Alcohol of all kinds increased 0.13%; Beer of all kinds rose 0.21% and cigarettes rose 0.02%.

The apparel, hats & footwear group rose 0.1% on increased summer consumer demand for hats, footwear and apparel services. The price for ready-made clothing increased by 0.08%; Hats up 0.31%; shoes up 0.11%; Garment services rose 0.26% and footwear services rose 0.27%.

The pharmaceuticals and medical services group rose 0.04%, mainly due to price increases of some cold and flu medicines and vitamins due to increased demand as the seasons change.

There are three groups of goods and services with falling price indices:

The education group decreased by 0.1% (the impact of a 0.01 percentage point reduction in overall CPI) as the government issued Resolution No. 165/NQ-CP on December 20, 2022, which required municipalities to to keep the tuition rate stable In order to continue to support the people, for the 2022-2023 school year and the 2021-2022 school year, some municipalities have reduced the tuition fees after they were reduced according to Regulation No. 81/2021/Decree-CP of August 27, 2021 were drafted into the government.

The post and telecoms group fell 0.17% on a fall in the price of smartphone accessories.

The transportation group fell by 2.98% (the impact of reducing the overall CPI by 0.29 percentage points), mainly due to: the domestic gasoline price fell by 7.83% (the impact led to a decrease in the overall CPI by 0, 28 percentage points) due to the impact of domestic price adjustments on May 4, 2023, May 11, 2023 and May 22, 2023; The price of transportation decreased by 0.07%.

On the other hand, there were a number of commodities whose prices increased in May 2023, including: the price of road passenger transport increased by 0.06%; railways by 2.53%; Air freight increased by 0.45% due to increased travel demand during the holidays of April 30 and May 1; Rental fees for self-driving cars and motorcycles rose 0.08%; Driver license fees increased 0.57% on strong demand; Vehicle maintenance service prices rose 0.19%, with motorcycle repair prices up 0.18% and bicycle repair prices up 0.23%.

Core inflation rose by 0.27% mom in May 2023, up 4.54% from the same period last year. On average, core inflation rose by 4.83% in the first five months of 2023 compared to the same period in 2022, ahead of the broad average consumer price index (+3.55%). The main reason is that the average domestic gasoline price fell by 15.27% in the first five months of 2023 compared to the same period last year. The 8.51% fall in the price of gas is one factor slowing down the rate of CPI growth, but that includes the group of commodities. Excluded from core inflation calculation.