Venezuela: Headline inflation continues to moderate in February
March 6, 2012
In February, the consumer price index for the Caracas Metropolitan Region rose 1.00% over the previous month, which came in below both the 1.49% price increase recorded in January and the 1.41% expected by Consensus Forecast panellists. In fact, the February print represented the lowest monthly gain since July 2007. The print decelerated across the board, in particular due to lower inflation for restaurants and hotels as well as for alcoholic beverages and tobacco. Moreover, inflation benefited from new price controls in some sectors. As a result of the milder rise in February, annual headline inflation stepped down from 26.3% in January to 24.8% in February, thus marking a nine-month low. Meanwhile, the core inflation index, which excludes volatile items such as fresh food, oil and other goods subject to government price controls, rose by 1.23% in February, which was down from the 1.64% seen in January. As a result, annual core inflation also ticked down from 28.9% in January to 25.6% in February. According to the 2012 budget, the Venezuelan government expects that inflation will fall to between 20% and 22% this year.