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Venezuela annual inflation tops 45 percent in August - ASHARQ AL-AWSAT English Archive
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Venezuelan President Nicolas Maduro talks and shows the Constitution during a press conference at the Miraflores Presidential Palace in Caracas on September 09, 2013. (AFP/Leo Ramirez)

Venezuelan President Nicolas Maduro talks and shows the Constitution during a press conference at the Miraflores Presidential Palace in Caracas on September 09, 2013. (AFP/Leo Ramirez)

Caracas, Reuters—Venezuela’s annual inflation rate hit 45.4 percent in August, the central bank said on Tuesday, the highest for the OPEC nation in five years, even as consumer price increases slowed from the previous month.

President Nicolas Maduro’s government has vowed to rein in inflation this year, but officials have indicated that they will revise the year-end target of between 15 and 20 percent that was set last year.

Inflation slowed to 3.0 percent in August, from 3.2 percent in July, thanks to a decline in the cost of housing services, and a slower increase in the price of education and health services, the central bank said.

That helped offset an acceleration in the prices of home appliances and entertainment services.

The annualized rate is Venezuela’s highest since 2008, when the government of Maduro’s late mentor Hugo Chavez implemented a new methodology for measuring price increases.

The country’s nagging product shortages, which have affected goods ranging from newsprint to toilet paper, worsened slightly in August from the previous month. The bank’s “shortage index” rose to 20 percent from 19.4 percent.

Venezuela’s monetary liquidity, the primary measurement of its money supply, has expanded by almost 40 percent during the last year – leaving a greater volume of the local bolivar currency chasing the same number of goods and services.

Heavy state spending in 2012, which helped Chavez win re-election, then a devaluation of the bolivar in February, have also worsened inflation.

Government leaders blame inflation on unscrupulous merchants arbitrarily raising prices of staple goods and basic services.

They also say that its impact has, in part, been offset by Chavez-era social programs including subsidized groceries and expanded health care services that have given extra help to the country’s poor.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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