World market
In July 2024, geopolitical and economic risks in many countries continued to impact global commodity prices. The war in the Middle East has not ended, combined with China's unstable economic recovery, causing oil and metal prices to continuously plummet.
+ Fuel group
Crude oil prices continued to fall as a strong dollar and mixed economic signals weighed on investor sentiment. Growing concerns about falling demand in China due to slower-than-expected growth also weighed on prices.
Oil prices fell to a six-week low, with Brent crude at just $81.01 a barrel and US WTI crude falling to $76.96 a barrel.
However, oil prices found some support as the US government reported a larger weekly draw in oil inventories and US economic growth in the second quarter of 2024 came in higher than expected.
+ Metal group
Over the past month, Chinese construction steel prices have continuously fallen due to China's gloomy demand outlook.
Iron ore prices have hit a three-month low due to persistent deflationary pressures and a sluggish real estate sector.
Prices of most steel products traded on the Shanghai Futures Exchange fell on July 29. Rebar fell nearly 0.4%, hot-rolled coil fell nearly 1.2%, and wire rod fell about 0.7%.
In contrast to iron and steel, gold prices continue to fluctuate, at times rising to a nearly two-month high supported by hopes of a Fed rate cut. In the short term, the Fed's September rate cut will continue to support gold prices.
+ Agricultural products group
Favorable weather has affected supply, causing prices of many agricultural products to fall.
Wheat prices continued their downward trend amid forecasts of abundant US spring wheat production and cheaper prices offered by Black Sea exporters, which also weighed on wheat prices.
U.S. soybean and corn prices hit multi-year lows at one point, but have since rebounded on increased buying and forecasts of lower harvests in some parts of the world.
Domestic market
In July 2024, the macro economy continued to maintain a positive trend, major balances of the economy and social security were ensured, and salary increases were implemented according to the roadmap.
However, our country's socio-economic situation still faces many difficulties and challenges. The world and regional situation continues to evolve rapidly, complexly and unpredictably. Domestically, the economy has opportunities, advantages and difficulties, challenges intertwined, but difficulties and challenges are greater such as inflationary pressure; the financial and monetary markets still have potential risks; investment, production and business activities in some areas are still recovering slowly...
According to the latest report of the General Statistics Office, the consumer price index (CPI) in July 2024 increased by 0.48% compared to the previous month, increased by 1.89% compared to December 2023 and increased by 4.36% compared to the same period last year.
The reasons for the increase in the consumer price index are due to domestic gasoline prices increasing according to world prices, increased demand for electricity, and health insurance premiums being adjusted according to the new basic salary.
In general, the CPI from the beginning of the year to now has tended to increase compared to the same period last year, from 3.37% in January 2024 to the highest level of 4.44% in May 2024. In June 2024, the CPI increase was 4.34% and in July 2024 it increased by 4.36%.
In the past 7 months, the CPI increased by 4.12% compared to the same period last year. The main reason is that in the 2023-2024 school year, some provinces and centrally run cities increased tuition fees according to the Resolution of the Provincial People's Council; medical service prices were adjusted according to Circular No. 22/2023/TT-BYT of the Ministry of Health, health insurance increased according to the basic salary. In addition, the housing, electricity, water, fuel and construction materials group; the food and catering services group increased in price due to increased consumer demand during the festival and tourism period.
Chart: Actual CPI into VITIC forecast
Source: VITIC synthesis
Inflationary pressures in the final months of the year may come from the Government adjusting the basic salary, increasing the price of medical services, education, and electricity according to the roadmap. However, in the remaining months of 2024, the following factors will slow down the growth rate of the price index:
- Major economies keep interest rates unchanged or slowly lower them, the world economy continues to stagnate, making it difficult for world commodity prices to increase sharply.
- Domestic consumer demand remains weak.
- Stable supply of basic food and provisions.
- Credit growth is still quite low.
- Pressure to increase USD/VND exchange rate will decrease because Fed cuts interest rates, causing USD to depreciate in the international market.
- Oil price risks will be reduced as demand in the world market remains weak, especially in China.
Based on synthesis and analysis, the Center for Industry and Trade Information forecasts that the CPI in August 2024 may increase by about 0.2% compared to the previous month.
Source: https://moit.gov.vn/tin-tuc/thi-truong-trong-nuoc/du-bao-cpi-thang-08-2024.html
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