Vietnam inflation hits 5.6% in May

Housing, electricity, and construction materials prices rose by 8.19% year-on-year, contributing significantly to the headline figure, partly due to seasonal heat driving up electricity tariffs and rental costs. Transport inflation saw a sharp acceleration to 12.48% year-on-year, driven by sustained fuel prices and increased public transport and logistics fares.

While food inflation moderated slightly to 5.03% year-on-year, inflation in outdoor catering services continued to rise, suggesting persistent service-side price pressures. Core inflation remained elevated at 4.67% year-on-year, indicating that inflation is becoming entrenched across both goods and services. With the five-month average CPI at 4.31%, the government's full-year inflation target of around 4.5% is under increasing pressure, with forecasts now suggesting an average of 4.5-5.0% for the full year.