Vietnam's consumer price index (CPI) rose to 5.60% year-on-year in May, marking a post-2020 high and a third consecutive monthly acceleration. Inflationary pressures have broadened beyond energy to housing, services, and consumer goods.
The sustained and broadening inflation in Vietnam puts increasing pressure on the government's full-year inflation target, potentially impacting monetary policy decisions and economic stability.
Consumer price inflation in Vietnam accelerated to 5.60% year-on-year in May, reaching a new high since 2020. This marks the third consecutive monthly increase, indicating that inflationary pressures have broadened beyond their initial energy-driven origins to encompass housing, services, and consumer goods.
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.