Venezuela: Inflation continues to soar in October
November 7, 2013
In October, the consumer prices rose 5.11% over the previous month, which was above the 4.39% increase tallied in September. The acceleration mainly reflects higher prices for alcoholic beverages and tobacco as well as for clothing and footwear.
Annual inflation skyrocketed from 49.4% in September to 54.3% in October, which represents the highest level since April 1997. Meanwhile, the core inflation index - which excludes volatile items such as fresh food, oil and other goods subject to government price controls - rose 5.83% over the previous month, up from the 4.67% increase recorded in September. As a result, annual core inflation jumped from 51.7% in September to 58.5% in October.
The country's scarcity index, which is a measure of the basic items that are out of stock at any given time, rose from 21.2% in September to 22.4% in October. The result marks the highest level since January 2008. In order to ease scarcity conditions ahead of the 8 December elections, the government has pledged that it will undertake a massive import of basic products.
According to the 2014 budget, the Venezuelan government expects inflation to end the year between 26.0% and 28.0%. LatinFocus Consensus Forecast panelists are considerably more pessimistic than the government and expect inflation to reach 48.4% by the end of this year, which is up 3.2 percentage points from last month's forecast. Next year, the panel sees inflation at 34.6%, which is up 2.2 percentage points over the previous month's estimate.