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Venezuela's annual inflation rises to 63.4% | Venezuela's annual inflation rises to 63.4% |
(about 3 hours later) | |
Venezuela's annual inflation rate has risen to 63.4%, the highest in Latin America, according to official figures published on Tuesday. | Venezuela's annual inflation rate has risen to 63.4%, the highest in Latin America, according to official figures published on Tuesday. |
The figures are the first released by the central bank since May, which has led critics to accuse the government of withholding data for political reasons. | The figures are the first released by the central bank since May, which has led critics to accuse the government of withholding data for political reasons. |
The poor state of the economy, among other issues, triggered mass anti-government protests earlier this year. | The poor state of the economy, among other issues, triggered mass anti-government protests earlier this year. |
They have since died down, but many continue to grapple with shortages. | They have since died down, but many continue to grapple with shortages. |
The central bank did not publish its scarcity index, a measure of goods that are missing from store shelves, but shortages of basic items such as flour, milk and toilet paper continue to be the bane of many shoppers. | The central bank did not publish its scarcity index, a measure of goods that are missing from store shelves, but shortages of basic items such as flour, milk and toilet paper continue to be the bane of many shoppers. |
'Protest slump' | 'Protest slump' |
While the bank said that month-to-month inflation had eased in August for the third straight month to 3.9%, the annual inflation rate reached a six-year high. | While the bank said that month-to-month inflation had eased in August for the third straight month to 3.9%, the annual inflation rate reached a six-year high. |
The government of President Nicolas Maduro blamed the soaring inflation on the protests, which rocked the country earlier in the year. | The government of President Nicolas Maduro blamed the soaring inflation on the protests, which rocked the country earlier in the year. |
Officials have argued that roadblocks erected by opposition activists hampered trade, and violent clashes between protesters and the security forces often forced shops to close early. | Officials have argued that roadblocks erected by opposition activists hampered trade, and violent clashes between protesters and the security forces often forced shops to close early. |
But many international economists argue that massive government spending and exchange rate controls are to blame. | But many international economists argue that massive government spending and exchange rate controls are to blame. |
Smugglers' paradise | Smugglers' paradise |
Price controls have also ensured that many products are much cheaper in Venezuela than in neighbouring Colombia, making the smuggling of goods a profitable business. | Price controls have also ensured that many products are much cheaper in Venezuela than in neighbouring Colombia, making the smuggling of goods a profitable business. |
The government estimates that 40% of subsidised goods are smuggled into Colombia, further exacerbating shortages in Venezuela. | The government estimates that 40% of subsidised goods are smuggled into Colombia, further exacerbating shortages in Venezuela. |
In an attempt to cut down on smuggling, the Venezuelan government announced last month that it would close the border at night time. | |
The Venezuelan prosecutor general said more than 350 people had been detained as part of the operation. | The Venezuelan prosecutor general said more than 350 people had been detained as part of the operation. |
The government in Caracas has not yet revealed its gross domestic product (GDP) forecast for 2014, but a number of international economists have been gloomy in their assessment. | The government in Caracas has not yet revealed its gross domestic product (GDP) forecast for 2014, but a number of international economists have been gloomy in their assessment. |
London-based economic research consultancy Capital Economics has predicted that Venezuela's GDP will contract by a cumulative 5% in 2014-2015. | London-based economic research consultancy Capital Economics has predicted that Venezuela's GDP will contract by a cumulative 5% in 2014-2015. |
It also warned of a "growing risk of a much deeper recession and default". | It also warned of a "growing risk of a much deeper recession and default". |
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