Vietnam's inflation extends downtrend in May on lower fuel prices

Hanoi, May 29 Vietnam's consumer prices recorded a downward trend in May as fuel costs continued to drop in line with the international market, according to the data released by the General Statistics Office (GSO) on Monday.

Inflation in the first five months hit 3.55 per cent from a year ago, below the year-on-year increase of 3.84 per cent in the first four months, likely backing the State Bank of Vietnam's decision of cutting its policy interest rates three times since the beginning of the year, according to the statistics data.

The retail prices of gasoline and oil products in Vietnam dropped 15.27 per cent in the first five months from a year ago, meanwhile, gas prices fell 8.51 per cent, Xinhua news agency quoted the GSO as saying in a statement.

Higher education expenses, up 8.39 per cent in the January-May period, continued to drive up living costs, followed by housing and construction materials prices as well as the cost of food and food services, which were up 6.62 per cent and 4.3 per cent year on year, respectively.

The statistics authorities said core inflation, excluding more volatile food, energy, and other public services prices, rose 4.83 percent in the first five months from a year earlier.

The Southeast Asian country posted a month-on-month inflation rate of 0.01 per cent in May, the lowest in the last three years.

The drop was mainly driven by the transportation sector, in which costs shrank 2.98 per cent from April, said the GSO.

Consumer price index in May rose 2.43 per cent from last year due mainly to dearer food prices and higher utility costs under impacts of persistent hot weather, the GSO added.