Reasons for the 0.98% increase in CPI in January 2025

Increased travel and shopping demand during the Lunar New Year holiday is one of the reasons why the CPI in January 2025 rose by 0.98% compared to the previous month.

Nine commodity groups increased, while two groups decreased.

According to a report released by the General Statistics Office on the morning of February 6th, the consumer price index (CPI) for January 2025 increased by 0.98% compared to the previous month. Compared to the same period in 2024, the CPI for January 2025 increased by 3.63%; core inflation for the month increased by 3.07%. Of the 0.98% increase in the CPI for January 2025 compared to the previous month, nine groups of goods and services saw price increases, while two groups experienced price decreases.

The consumer price index in January 2025 increased by 0.98% compared to the previous month. Photo: Chau Nu

Specifically, nine groups of goods and services saw price increases, including: the group of medicines and medical services, which increased the most with a 9.47% increase compared to the previous month, contributing 0.51 percentage points to the overall CPI increase.

The transportation group increased by 0.95%, contributing 0.09 percentage points to the overall CPI increase. Specifically: Increased travel demand during the year-end period led to a 11.08% increase in air passenger transport prices; road and waterway passenger transport both increased by 1.73%. Gasoline prices rose by 2.02%, and diesel prices increased by 4.99% due to domestic fuel price adjustments.

The food and beverage group increased by 0.74%, contributing 0.25 percentage points to the overall CPI increase, including: cereals increasing by 0.3%; food increasing by 0.97%; and eating out increasing by 0.33%.

The beverages and tobacco group increased by 0.69% due to increased consumer demand and use as gifts during the Lunar New Year, causing the prices of alcoholic beverages to rise by 0.8%; cigarettes by 0.7%; and non-alcoholic beverages by 0.36%.

The group of other goods and services increased by 0.51%, mainly due to price increases in some items such as haircut and hair washing services (up 1.91%); jewelry (up 0.95%); and wedding services (up 0.56%).

The clothing, hats, and footwear group increased by 0.38% due to rising labor costs, material costs, and increased demand for winter clothing and preparations for the Lunar New Year (Year of the Snake).

The housing, electricity, water, fuel, and building materials group increased by 0.35%, mainly due to price increases in several items such as rent (up 0.84%) driven by increased demand for apartments and boarding houses, and also because the recent surge in real estate prices has led landlords to raise prices to reflect investment costs; home repair services (up 0.74%); and other housing-related services (up 0.27%) due to increased demand at the end of the year...

The household appliances and furnishings group increased by 0.31% due to increased consumer demand during the wedding season and Lunar New Year. Specifically, prices for household services increased by 1.73%; blenders and juicers increased by 0.8%; and glassware, earthenware, and porcelain increased by 0.66%...

The culture, entertainment, and tourism group increased by 0.27%, mainly concentrated in the following items: Prices of flowers, ornamental plants, and decorative items increased by 1.59% due to increased demand during the Lunar New Year of the Year of the Snake 2025; package tours increased by 0.64% due to increased travel demand and service costs; hotels and guesthouses increased by 0.43%; and books, newspapers, and magazines of all kinds increased by 0.12%.

Two groups of goods and services saw a decrease in price index: the education group decreased slightly by 0.04%, with educational services decreasing by 0.05%, mainly due to Ho Chi Minh City implementing the People's Council Resolution on special policies to support tuition fees for public and private secondary school students and secondary school continuing education students in the 2024-2025 school year.

The postal and telecommunications group decreased by 0.12%, with the following breakdown: smartphone and tablet prices decreased by 0.74%; smartphone and tablet accessories decreased by 0.72%; regular mobile phones decreased by 0.35%; landline phones decreased by 0.02%; while phone repair prices increased by 0.27%.

Core inflation in January 2025 increased by 0.42%.

Regarding the reasons for the 0.98% increase in the Consumer Price Index (CPI) in January 2025 compared to the previous month, according to the General Statistics Office, the main causes of the increase were the adjustment of medical service prices in some localities according to Circular No. 21/2024/TT-BYT, and the increase in transportation and food prices due to increased travel and shopping demand during the Lunar New Year holiday.

Core inflation in January 2025 increased by 0.42% compared to the previous month and by 3.07% compared to the same period last year. The 3.07% year-on-year increase in core inflation is lower than the overall CPI average (3.63%), mainly due to the increase in prices of food, electricity, and healthcare services, which are factors contributing to the CPI increase but are excluded from the calculation of core inflation.

Domestic gold prices fluctuate in line with world gold prices. As of January 27, 2025, the average world gold price was $2,719.63 per ounce, up 2.26% compared to December 2024. This increase is driven by investor concerns about rising global inflation, as some policies of US President Donald Trump, including high tariffs on imports from China, Mexico, and Canada, have increased the attractiveness of gold. Domestically, increased demand for gold before the Lunar New Year led to a 1.03% increase in the gold price index in January 2025 compared to the previous month; and a 29.13% increase compared to the same period last year.

As of January 27, 2025, the US dollar price index on the international market reached 108.57 points, an increase of 1.49% compared to the previous month due to rising US government bond yields. Domestically, the average US dollar price on the free market was around 25,518 VND/USD. The US dollar price index in January 2025 increased by 0.21% compared to the previous month and by 3.98% compared to the same period last year.

In 2025, the National Assembly approved a target of controlling inflation at around 4.5%. According to economic experts, this is not an overly ambitious target; however, complacency should still be avoided, especially given the rapidly changing and unpredictable global economic and political situation.

Source: https://congthuong.vn/ly-do-cpi-thang-12025-tang-098-372497.html