Food prices fell 9.5 percent while transportation and telecommunications costs fell 9 percent and 11 percent respectively from the same period a year earlier, the General Statistics Office said in a statement.

The agency often issues consumer price index ahead of the month's end based on estimates.

Last year, the country's inflation rate soared to nearly 23 percent, the highest rate since 1991.

Meanwhile, Vietnam's trade deficit narrowed dramatically in the first eight months of this year as imports fell faster than exports, the agency said.

The trade deficit for January through August was $5.1 billion compared with $16 billion in the first eight months of last year, it said. The deficit was $17 billion for all of 2008.

Vietnam's main export items were crude oil, garments, rice, seafood and coffee. It biggest imports were refined gasoline, construction steel, plastics and machinery.

Crude oil export saw a decline in value of 48 percent to $4.1 billion due to falling world prices while garments and textile exports totaled $5.9 billion, a decrease of 1.4 percent.

Fuel imports fell 62.6 percent to $3.38 billion while imports of machinery declined 16.7 percent to $7.39 billion. The country still has to import much of its gasoline as the first oil refinery plant only partially satisfies domestic needs.

The Associated Press - August 26, 2009