Higher energy prices become key concern

Vietnam’s inflationary landscape is intensifying as global oil prices remain elevated, pushing the country’s consumer price index closer to the government’s target ceiling.

- By Thanh Thanh

According to the National Statistics Office, the average consumer price index (CPI) in the first five months of this year expanded 4.31 per cent on-year, leaving a narrow margin for policymakers to maintain inflation within the National Assembly’s target range for the remainder of 2026. Inflation has been targeted to reach 4.5 per cent for the whole year.

The latest data indicates that CPI in May climbed 0.29 per cent on-month, driven largely by higher electricity and water bills during the hot season, rising construction material prices, higher rental costs, and increasing fuel prices. May’s CPI increased 3.61 per cent compared to last December, and 5.6 per cent against the corresponding period last year.

The inflation ascension reflects mounting cost pressures in many sectors of the economy, particularly those directly exposed to energy price fluctuations.

Housing, electricity, water, fuel, and construction materials recorded the strongest ascension among major consumption groups, rising 6.64 per cent and contributing 1.51 percentage points to overall CPI growth. Food and catering services climbed 4.77 per cent, adding 1.71 percentage points to inflation, while transportation costs jumped 5.22 per cent, contributing a further 0.52 percentage points.

The rates underscore the extent to which rising global energy prices are filtering through the economy, affecting not only transportation but also production, logistics, and household expenditures.