Venezuela: Inflation continues to soar in August
September 10, 2013
In August, the consumer price index for the Caracas Metropolitan Region rose 2.97% over the previous month, which was below the 3.44% increase tallied in July. The moderation mainly reflects milder increases in prices for transportation and clothing and footwear.
Annual inflation soared from 40.7% in July to 43.4% in August, which represents the highest level observed since May 1997. Meanwhile, the core inflation index - which excludes volatile items such as fresh food, oil and other goods subject to government price controls - rose 4.15% over the previous month, up from the 3.83% increase tallied in July. As a result, annual core inflation jumped from 44.7% in July to 49.1% in August.
According to the 2013 budget, the Venezuelan government expects inflation to end the year between 14.0% and 16.0%. LatinFocus Consensus Forecast panelists are considerably more pessimistic than the government and expect inflation to reach 40.8% by the end of this year, which is up 0.9 percentage points from last month's forecast. Next year, the panel sees inflation at 30.1%.