[progchat_action] Double-digit Venezuelan inflation
 
Date: Wed, 6 Feb 2008 09:12:17 -0600 (CST)


http://latimesblogs.latimes.com/laplaza/2008/02/venezuelan-infl.html

Double-digit Venezuelan inflation

Venezuela's inflation rate hit its highest level in a decade last
month, reaching an annualized rate of 24.1% , which also is the highest
in South America.

The reason is classic economics: Demand is outstripping supply in a
nation where consumers are flush with oil dollars. And price controls
imposed as part of Hugo Chavez's socialist revolution inhibit
production.

Inflating even faster are rents, which rose an average 25% between June
and December, according to the Venezuelan Real Estate Chamber. The same
law applies: urban growth caused by rural migration and foreign
residents is pushing demand for housing while rent control and the
government's encouragement of squatters are discouraging builders from
breaking ground on new projects.

The worst may not be over, according to a study by Jose Guerra, Orlando
Ochoa and Oscar Garcia Mendoza. High inflation could continue for years
to come, caused in part by high government spending.

--Chris Kraul in Bogota

February 05, 2008 | Permalink
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