Venezuela: Inflation continues to fall
September 4, 2012
In August, the consumer price index for the Caracas Metropolitan Region rose 0.97% over the previous month, which virtually mirrored the 0.98% increase seen in July and undershot market expectations that had prices adding 1.81%. The monthly price increase mainly reflected higher prices for non-alcoholic beverages and tobacco as well as for transportation. Building on the relatively subdued monthly print, annual headline inflation moderated further from 19.4% in July to 18.6% in August, its lowest level since October 2007. Meanwhile, the core inflation index, which excludes volatile items such as fresh food, oil and other goods subject to government price controls, rose 1.06% over the previous month, slightly up from the 0.92% increase tallied in July. Nonetheless, annual core inflation edged down from 22.5% in July to 21.7%. According to the 2012 budget, the Venezuelan government expects inflation to end the year between 20% and 22%.