Food prices hit 11-month high

The sharp increase in prices of eggs, meat, and vegetables has caused the food price index to jump to its highest level since last year’s Tet. The adjustment of hospital fees in many localities also contributed to the 1.25% increase in the CPI in January 2013.

Compared to the January price increase rate of recent years, the figure of 1.25% is not too high (CPI in January in the period 2010 - 2012 was 1.36%, 1.78% and 1% respectively). However, the fact that CPI in the first month was equivalent to about a quarter of the annual inflation target (about 6%) is very noteworthy.

Food was one of the main factors causing price increases in January.

In terms of structure, the food and beverage service and healthcare groups are the two main drivers of price increases. Due to seasonal and weather impacts as well as price manipulation by some businesses, prices of items such as eggs, meat, and vegetables in many localities increased sharply in January, affecting the overall index.

Specifically, food prices increased by 1.96%, reaching the highest level in the past 11 months. Prices of food and eating out also increased by 0.15% and 0.6% respectively, causing the index in the food and catering services group to be 1.34% higher than in December 2012. This is also the highest increase of this index since February 2012.

Along with food, medicine and medical services are also important factors pushing up prices. According to previous data from the General Statistics Office, at the end of 2012, there were still over 30 provinces and cities that had not adjusted the prices of medicine and medical services according to the new standards. The change in the new fee framework in these localities caused the general price of medical services to increase by 9.5% in January. In the whole group of medicine and services, the price increase in the month was 7.4%.

In addition to the two groups mentioned above, another commodity that also had a price increase of over 1% in January was clothing - hats - footwear. However, the increase was only 1.3% and was mainly due to seasonal and weather factors. In the remaining commodity groups, the price index increase was only below 1%, except for post and telecommunications, which decreased by 0.05%.

Although not included in the basket of goods used to calculate CPI, the price movements of gold and US dollar indexes also attracted attention, as they decreased by 1.73% and 0.08% respectively.

According to VN Express - TH