CPI forecast revised upward on higher transport cost

CPI forecast revised upward on higher transport cost

Robust Tet holiday demand, particularly in food, pushed Vietnam’s CPI to 3.35% y/y in Feb-26 (1.14% m/m, highest level since Feb-21), from 2.53% in January, above our 3.1% call. 2M26 CPI averaged 2.94% y/y, below our upwardly revised 4.3% forecast (up 40bps) and the SBV’s 4.5% band. We expect March inflation to rise 4.11% y/y, driven by higher transport costs, while revising our FY26F CPI upward by 0.4ppts to 4.3%, reflecting an increase in transport contribution following our upwardly revised Brent crude oil assumption. Global inflation risks shift from tariff-induced to transport-led amid rising geopolitical tensions. While China’s CPI rebounded on strong Tet demand, within the US, futures has delayed rate cut bets to only one cut in 2026 and one in 2027.