Vietnam’s inflationary pressures intensify
Inflationary pressures in Vietnam are mounting as the consumer price index (CPI) in September rose 0.62% from the previous month and 5.08% from a year earlier.
For the first nine months of the year, CPI increased 4.52%, above the 3.27% rise recorded in the same period last year and slightly exceeding the government’s target of controlling inflation at around 4.5% for this year.
This was the highest nine-month average CPI rise recorded during the 2016-2026 period, according to the National Statistics Office (NSO).
At a press meeting on Saturday, NSO director Nguyen Thi Huong stressed that pressures from input costs, energy price fluctuations and inflation risks remained, posing challenges for economic management in the period ahead.
She said fuel prices were being managed proactively and flexibly, in line with global price movements and domestic supply and demand. The supply of essential goods was broadly ensured, helping maintain market stability. However, factors putting pressure on the overall price level had yet to subside.
The structure of price hikes over the first nine months showed that inflationary pressures were not limited to a few temporary items but were also concentrated in essential goods and services that can directly affect living costs and business and production activities.
According to NSO data, prices of food and catering services rose 4.72% year-on-year, contributing 1.69 percentage points to the overall CPI increase. This was the largest contribution among the main groups of consumer goods and services.
Within this group, pork prices climbed 4.46%, poultry prices increased 3.93%, while prices of food services outside the home jumped 7.14%.
Higher input and service costs, along with increased consumer demand, were among the factors affecting price movements. Given the significant share of food and catering in household spending, price fluctuations in this group have a direct impact on how consumers perceive inflation.
The housing, electricity, water, fuel and construction materials group rose 6.68%, adding 1.52 percentage points to the overall CPI expansion. Within the group, prices of housing maintenance materials surged 13.07%, rents 4.91% and household electricity prices 4.35%.
The developments reflected pressure from both housing construction and repair costs as well as the cost of maintaining households. In particular, higher construction material prices could raise investment and construction completion costs while putting pressure on the prices of goods and services in related sectors.
In the transport group, prices rose 6.06% in the nine-month period, adding 0.6 percentage points to the overall CPI increase. Fuel prices went up 10.89% year-on-year. In September alone, transport prices rose 3.97% from the previous month, with petrol prices up 9.39% and diesel prices 4.53%, mainly due to domestic fuel price adjustments.
Energy prices have an impact beyond the transport sector. When petrol and diesel prices rise, transportation and distribution costs can also increase, putting pressure on the selling prices of many other goods. The extent of the pass-through depends on fuel price movements, logistics costs, businesses’ ability to absorb higher costs, and market purchasing power.
At the same time, input costs in the production sector also showed an upward trend. According to the NSO, in the first nine months of 2026, the producer price index for industrial products rose 4.37%, while the price index for raw materials, fuel and materials used in production climbed 5.12% year-on-year. Both were the highest increases for the same period during 2023-2026.
These indicators do not mean that all higher costs will immediately be passed on to consumer prices. However, if raw material, energy and transportation costs remain elevated, businesses may have to choose between narrowing profit margins, cutting costs or adjusting selling prices. If consumer demand remains firm, the risk of higher input costs being passed through to final goods and services will need to be closely monitored.
One notable development was that core inflation averaged 4.26% in the first nine months, below the 4.52% increase in headline CPI. In September alone, core inflation rose 0.11% from the previous month and 4.45% from a year earlier.
The gap between the two measures partly reflects the role of items with volatile prices, such as petrol, gas, food and fresh produce, and healthcare services, in headline CPI. These groups are excluded from the calculation of core inflation. Therefore, headline CPI rising faster than core inflation indicates significant pressure from specific price factors, but is not sufficient to conclude that inflationary pressures have spread evenly across all groups of goods and services.
Nevertheless, CPI movements over the past two months and rising production costs underscore the need for greater caution in price management in the fourth quarter. The target of around 4.5% is already under pressure, with average CPI for the first nine months reaching 4.52%. If prices continue to rise in the remaining months, bringing the full-year average below that threshold will become increasingly difficult.
Against this backdrop, economic management will need to balance price stability with maintaining growth momentum. Containing prices cannot rely solely on administrative measures but needs to be accompanied by ensuring supply, reducing circulation costs, improving market transparency and curbing the practice of using fluctuations in input costs to raise prices unreasonably.
From now until the end of the year, CPI movements will depend significantly on global energy prices, input costs, food supplies and the timing of adjustments to prices of essential goods and services.
With average CPI already above the target of around 4.5%, controlling inflation is not only a task for the final months of the year but also has implications for price expectations, the cost of capital and purchasing power in the economy in the following year.
Source: Dinh Vu, Minh Hue
Photo: Photo courtesy of Aeon
