The general Statistical Office’s (GSO) announcement that the consumer price index (CPI) decreased by 0.26 percent has raised doubts among people-who claim the continued price increases.
CPI and people’s pockets are the two unrelated stories
The GSO, when declaring the CPI decrease of 0.26 percent for June, explained that the decrease has been generated by the price reductions of houses and construction materials, an inevitable consequence of the freezing real estate market. Besides, the reductions of transport fees and telecommunication charges, caused by the petroleum price decreases, have also contributed to the CPI decrease.
The two categories of goods and services account for 20 percent, or 1/5 of the “basket of goods” GSO referred to when calculating CPI.
However, people have argued that the consumer goods prices have not decreased as announced by GSO. Especially, the food and foodstuff prices have been stable or increasing by a little. Meanwhile, the categories of goods and services account for 43 percent of the basket of goods.
Consumers in the two biggest cities of Hanoi and HCM City still complain that they have to pay unchanged high for meals and essential goods and services.
Ngo Tri Long, a well-known price expert, has also noted that except some kinds of goods and services which have decreased in prices, others remain unchanged. However, consumers have no other choice than recognising the figures, because there has been no further survey and other data.
Vu Dinh Anh from the Finance Institute has affirmed that the CPI does not reflect the prices of all kinds of goods and services, and that only 600 items out of tens of thousands of products have been chosen by GSO when it measures the price index. Meanwhile, the list of the goods and services has not been made public.
Anh went on to say that he cannot see any contradiction between the CPI decrease and the little price decrease, emphasising that CPI is just a general indicator. The price index has been “synthesized” from the prices of many different groups of goods and services applied all over the world, not only in Vietnam. Moreover, the figure of 0.26 percent CPI decrease in June was not high.
“People should not expect that the CPI reduction would help them have more money. CPI only shows the price fluctuation performance, while it does not show the price levels,” Anh said.
“The decreased CPI and the pocket of housewives are the two separated stories,” Anh said.
Essential goods would not decrease in prices
Economists have pointed out that the big inventories and the weak demand, which have forced manufacturers and suppliers to slash sale prices, are the main reason behind the CPI decrease. However, the price fluctuations are not the same in all business fields.
Big retailers in Vietnam have affirmed that they still have not heard any notices from thousands of suppliers about the price decreases. The big inventories have existed only in some industries, while food and consumer goods still have been selling well.
The retailers have also affirmed that they cannot see any attempts by producers and suppliers to clear their big stocks.
Cement, steel and some other associations, which represent manufacturers, have repeatedly complained about the high inventories. Three million tonnes of cement, worth over 3 trillion dong, 40 million square meters of tile products and 1 million sanitary wares have been reportedly left unsold.
However, no association has shown the figures about the price reductions relating to the increasingly high inventories.