Venezuela: Inflation skyrockets to highest level since 1997
August 6, 2013
In July, the consumer price index for the Caracas Metropolitan Region rose 3.44% over the previous month, which was below the 4.31% increase tallied in June. The moderation mainly reflects lesser increases in the prices of food and non-alcoholic beverages as well as household equipment.
Annual inflation soared from 37.3% in June to 40.7% in July, which represents the highest level observed since June 1997. Meanwhile, the core inflation index - which excludes volatile items such as fresh food, oil and other goods subject to government price controls - rose 3.83% over the previous month, down from the 4.97% increase tallied in June. As a result, annual core inflation jumped from 40.6% in June to 44.7% in July.
According to the 2013 budget, the Venezuelan government expects inflation to end the year between 14.0% and 16.0%. LatinFocus Consensus Forecast panellists are much more pessimistic than the government and expect inflation to reach 36.1% by the end of this year, which is up 0.1 percentage points from last month's forecast. Next year, the panel sees inflation at 29.1%.