Merentes Seeks Single-Digit Venezuela Inflation by 2013 as Output Climbs

Venezuela’s central bank is working to slow annual inflation to single digits by 2013 as South America’s largest oil producer seeks “sustainable” growth starting next year, bank President Nelson Merentes said.

Venezuela’s inflation rate will quicken to 28 percent to 29 percent in 2010 before beginning to slow by as much as nine percentage points next year, Merentes said. The country hasn’t had annual inflation of less than 10 percent since April 1986.

Prices should begin to ease as Venezuela substitutes domestically produced food goods for imports and boosts manufacturing, the bank president said.

“We’re preparing to take inflation down a few steps to get to a single digit as soon as possible,” Merentes said today on state television. “Price increases are still high, and it’s a fundamental task for the bank.”

Venezuela, which reported 30 percent annual inflation for August yesterday, has the highest rate of 78 economies tracked by Bloomberg. The OPEC-member country is a net food importer and depends on oil sales for 95 percent of export revenue.

The central bank forecasts inflation will slow to about 12 percent in 2012, according to Merentes.

Venezuela’s economy is showing signs of recovery despite contracting for a fifth consecutive quarter from April through June and will seek “sustainable growth” in coming years, Merentes said.

“The worst has passed,” he said. “The problem now isn’t just to grow in the short term, but to seek sustainable growth during a longer period of time. We’re not looking to grow 9 percent to 10 percent a year.”

To contact the reporter on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net.

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email