Venezuela's Inflation Rate Is 56%

Caracas venezuela shopping market inflationREUTERS/Carlos Garcia RawlinsA woman walks at a market in Caracas.

Venezuela’s inflation soared to 56.2 per cent in 2013 but slowed in the last two months of the year after the socialist government forced stores to cut prices, officials said Monday.

The national consumer price index decelerated from 5.1 per cent in October to 4.8 per cent in November and 2.2 per cent in December, the central bank said in a report that was 20 days late.

President Nicolas Maduro said the figures led to annual inflation of 56.2 per cent — the highest in Latin America — which he blamed on a “parasitic capitalist economy.”

“If Venezuela was not subjected to this economic war, we would have single-digit inflation, not 56 per cent,” Maduro told a news conference.

Inflation is nearly three times as high as in 2012, when it hit 20.1 per cent.

Maduro ordered appliance stores in November to slash prices, sent troops to enforce the move and threatened to arrest store owners who refused to comply.

Analysts attribute the nation’s high inflation to rigid currency and price controls that were launched in 2003 by late president Hugo Chavez, who died in March this year.

The government has fixed the exchange rate at 6.3 bolivars for one dollar, fuelling a black market where the US currency is obtained at nine times the official rate.

The oil-rich country, which is heavily dependent on imports, has been plagued by shortages of basic goods ranging from meat to toilet paper.

The central bank’s report lacked its usual “scarcity” index, which serves gauge of the country’s chronic shortages.

Maduro said authorities found food prices inflated by more than 3,000 per cent and that, had it not been for government-subsidized food programs, “there would have been a famine.”

The central bank’s report said food prices jumped 7.5 per cent in November compared to 5.6 per cent a month earlier.

“As has been the case in Venezuelan history, political tension and economic destabilization mixed in the form of a real economic war against the Venezuelan people,” the central bank said.

Copyright (2013) AFP. All rights reserved.

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