SUMMARY
 
In 2021, the average consumer price index (CPI) increased by 1.84% compared to the figure in 2020, hitting the lowest increase since 2016, meeting the target set by the National Assembly in the context of pressures from a high rise in the global inflation. While the country faced great difficulties caused by the impacts of the Covid-19 pandemic, this result was achieved thanks to the close direction of the Government, the active implementation of synchronous solutions of ministries and agencies to prevent pandemic and stabilize market prices.
 
In 2021, the main reasons for an increase in the average CPI were as follows:(i) In 2021, the prices of domestic gasoline and petroleum were adjusted 22 times, of which the price of A95 gasoline; E5 gasoline and diesel oil increased by 6,820 VND/liter; 7,040 VND/liter and 5,200 VND/liter, respectively. The average annual price of domestic gasoline and petroleum shot up 31.74% compared to that in the previous year, which made the overall CPI increase by 1.14 percentage points. (ii) The price of the domestic gas fluctuated in line with the prices of the world gas. In 2021, the retail price of the domestic gas was adjusted to increase 9 times and decrease 3 times, the average annual price of gas surged up 25.89% compared to that in the previous year, which led to a rise of 0.38 percentage points in the overall CPI. (iii) An increase in the domestic rice price in accordance with the export rice price, increasing demand for glutinous rice and delicious rice during Tet holidays and people’s need for accumulation during the time of social distancing caused a rise of 5.79% in rice price in 2021 over that in 2020 (making the overall CPI increase by 0.15 percentage points); (iv) In 2021, the price of housing maintenance materials edged up 7.03% compared to that in the previous year, which resulted from an increase in the price of cement, iron, steel, sand in line with the price of input materials, leading to an increase of 0.14 percentage points in the overall CPI. (v) In 2021, the price of educational services expanded by 1.87% over that in 2020 (contributing to an increase of 0.1 percentage points in the overall CPI), caused by the influence of increase in the tuition fee for the 2020-2021 new school year according to the roadmap of Decree No. 86/2015/ND-CP dated October 2, 2015 of the Government.
 
Besides, some factors to curb on the CPI growth rate in 2021 were as follows: Firstly, the complicated development of the Covid-19 pandemic had significant impacts on people's consumption demand. In 2021, gross retail sales of goods and consumer services was estimated to reach 4,657.1 trillion VND, declined by 3.9% compared to that in the previous year (grew down 0.9% in 2020). In 2021, low aggregate demand caused a reduction of 0.54% in the price of food products over that in 2020, a decline of 0.12 percentage points in the CPI, of which the price of pork and chicken shrunk by 10.52% and 0.28%, respectively. Furthermore, the demands for services of tourism, culture, entertainment and recreation also dropped sharply, the travel restriction caused a fall of 21.15% in airfares in 2021 compared to that in the previous year; a decrease of 2.32% in the package tour. Secondly, the Government implemented supporting packages for people and producers facing difficulties due to the Covid-19 pandemic. The supporting package of the Electricity of Vietnam (EVN) that reduced electricity prices and electricity bills for customers in the fourth quarter of 2020 was implemented in January 2021, and decreased electricity prices and electricity bills for people in localities with social distancing in line with Directive No. 16/CT-TTg at electrical bill period of August and September 2021. Therefore, the average price of consumed electricity in 2021 declined by 0.89% over that in 2020, causing a fall of 0.03 percentage points in the overall CPI. Running water price also fell 2 times to support for the people affected by the pandemic. The supporting package of telecommunications service with telecommunications fee and discounts was implemented from August 5, 2021 and lasted for 3 months to share difficulties of people and those affected by the Covid-19 pandemic. With suspending the implementation of the roadmap of increasing tuition fees for educational services, many localities applied policy on exemption and reduction of tuition fees for people in order to curb the CPI growth rate. Hence, the low social demand due to the implementation of social distancing in association with reduction in essential goods and services made the CPI humbly increase.
 
The core inflation (CPI excepts fresh food and foodstuff; energy and state- managed goods including health and educational services) in 2021 increased by 0.81% compared to that in 2020. On average, the growth rate of the general inflation in 2021 was higher than the core inflation, reflecting the price fluctuations mainly due to the rise in prices of food, gasoline and gas. The core inflation in 2021 hit the lowest level compared to that in the previous year since 2011.