Venezuela has the highest inflation in Latin America
SALMERÓN VICTOR - EL UNIVERSAL
Between May 2007 and May this year inflation recorded a jump of 31.4% in Venezuela, a magnitude which is the highest in Latin America, in fact, official figures show that in the same period, Mexico collects 4.95% Peru 5.39%, 5.58% Brazil, Colombia and Uruguay 6.39% 7.2%.
Nicaragua, with inflation at 21.74% to 16.84% and Bolivia are the countries of the Americas that are closer to Venezuela.
Although the increase in food prices shakes the world again, the Venezuelan mismatch of proportion. In the last twelve months the cost of food in Caracas shown an explosive increase of 47.3% while in Colombia the impact in the same period is 9.73%, Chile 19.4%, 22.74% Costa Rica and Peru 9.2%.
Surrounded by mouth inflation and economic slowdown from 8.8% to 4.8% in the first quarter, Hugo Chavez announced a series of measures last week.
to contain prices of medicine was to eliminate the tax on financial transactions, a charge which forced companies to pay 1.5 per hundred Bolivars to move through their bank accounts and led to the direct transfer costs on the final price of the products.
While this step is seen as positive, analysts not lose sight that this is merely an effect on time, ie, inflation may step down from 4 to 2, but will continue the rise with the same force next month.
Last year, thanks to the reduction of VAT, the March inflation was negative 0.7% in April and May but quickly regained the upward trend with increases of 1.4 and 1.7%.
disease Packed with resources
oil sheen, the government of Hugo Chávez high dose injected money into the economy generating an excess demand that fuels inflation.
To try to contain the escalation, the Government controlled the cost of a wide range of products, but then production was strongly discouraged and shortage gripped the markets and supplies.
Slammed by the absence of food, the economic cabinet had no alternative but to allow adjustments of between 30 and 84% in products that affect the diet of the population with fewer resources, such as chicken, rice and corn flour.
ineffective
Central Bank statistics indicate that Venezuela's price control away from eliminating inflation has only served to dam.
In the first five months of this year unregulated products accumulate around the average jump country of 12.3% and those subject to price controls 12.5%, ie inflation is higher in the goods which in theory should increase.
The greatest mismatch occurs in Maracaibo, where controlled products accumulate at the end of May increased 12.7% and those within the free play of supply and demand of only 9.9%.
Facing the loss of effectiveness of price control by the economic cabinet has taken other steps to try to deflate the balloon inflation.
medicine has focused on the belief that inflation is mainly due to many Bs trying to buy a few products, so you need to stop expansion of money.
To this end the government slowed the pace of public spending, increased interest rates and sold dollar bonds to absorb market Bs, but the result was not expected. Analysis
investment banks suggest that the fault is that until now have not taken effective action on the supply side, to stimulate production and enable appropriately meet demand.
The President, in a strategic shift, called last week to the private sector to a "productive partnership" and tabled a fund of one billion dollars to finance investment projects.
However, this figure represents only 1.85% of total investment, public and private, were in the country in 2007.
Central Bank data indicate that the ability to limit production work.
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