Venezuelan inflation rate rises to 7.1% in February

www.vheadline.com Posted: Tuesday, March 04, 2003 By: Robert Rudnicki

Venezuela's inflation rate rose to 7.1% in February, a seven year high caused by increased demand a reduced supply brought about by price controls enforced by the government six weeks ago as a result of severe pressure on the nation's international reserves.

Last month's figure was the highest since June 1996, when a similar figure was reported.

February's 7.1% saw the 12 month trailing inflation rate rise to near 39%, the highest level since 1997.

The rise in inflation rates had been forecast by many analysts, who cautioned that imposing price controls would significantly reduce supply of goods and therefore force prices higher.

Central Bank of Venezuela (BCV) director Armando Leon said "price controls have had less impact than the authorities expected ... they have caused a drop in the supply of goods."