MARCH 2026 CPI HIT A FIVE-YEAR HIGH DUE TO SHOCKS IN ENERGY AND TRANSPORTATION COSTS

According to the Q1/2026 socio-economic report released by the General Statistics Office under the Ministry of Finance on April 4, the Consumer Price Index (CPI) in March 2026 rose by 1.23% compared to the previous month and increased 4.65% year-on-year — marking the highest March annual increase in the past five years.

Of the 1.23% monthly increase, 9 out of 11 categories of goods and services recorded price hikes, while only two categories declined.

The primary driver pushing CPI upward was the transportation group, which surged 12.85% and contributed 1.28 percentage points to overall CPI growth — the highest among all categories. The main cause stemmed from geopolitical tensions in the Middle East disrupting global supply chains, leading to sharp increases in domestic fuel prices: diesel rose 57.03% and gasoline climbed 29.72%. Escalating fuel costs quickly spread to the transportation sector, sending airfares up 23.19% and railway transport prices up 13.92%.

Meanwhile, the housing and construction materials group increased 0.77% due to rising input costs and higher energy prices. On the other hand, following the Lunar New Year consumption peak, cooling demand caused the food and catering services group to decline 0.59%, partially easing inflationary pressure on CPI.

Overall, average CPI in Q1/2026 increased 3.51% compared to the same period last year. Housing and construction materials led the upward trend with a 5.69% increase (contributing 1.29 percentage points to overall CPI), followed by food and catering services, which rose 4.55%, mainly driven by higher pork prices and increased dining-out costs during the holiday season.

Notably, core inflation in March rose 0.47% month-on-month and 3.96% year-on-year, while the Q1 average increased 3.63%, higher than the overall CPI increase. This was largely because food prices — which typically help moderate CPI — are excluded from core inflation calculations.

On a positive note, the information and communications group fell 0.20% thanks to abundant device supply and intense competition among distributors, helping stabilize overall price levels.

Meanwhile, the gold and foreign exchange markets experienced notable fluctuations. In the international market, average gold prices as of March 28 fell 2.27% from the previous month to USD 4,909.01 per ounce due to profit-taking pressure and capital flows shifting toward the US dollar. In contrast, domestic gold prices still rose 1.54% month-on-month and surged 82.77% year-on-year, mainly driven by market sentiment and pricing adjustments by businesses.

Regarding exchange rates, the Vietnamese dong moved in line with international currency market trends. On the free market, the average USD exchange rate hovered around VND 26,315 per USD. The US Federal Reserve’s decision to maintain high interest rates (3.5%–3.75%), combined with safe-haven demand amid geopolitical risks, pushed the domestic USD price index up 0.72% in March and 2.58% overall in Q1/2026.

Source: VnEconomy