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Venezuela’s Inflation Rate Rises at Fastest Pace in 7 Months

Nov. 3 (Bloomberg) -- Venezuela’s inflation rate, the highest of 78 economies tracked by Bloomberg, rose to a seven-month high in October on food and education costs.

Inflation, as measured by the national price index, accelerated to 26.9 percent, according to the central bank’s national price index, matching the median forecast of four analysts in a Bloomberg survey. Consumer prices rose 1.8 percent in October, the bank said today in an e-mailed report.

Venezuelan inflation is quickening as the government adjusts price caps on basic goods to avoid shortages ahead of next year’s presidential election, where President Hugo Chavez hopes to win a third six-year term. The government raised prices on milk and vegetable oil twice this year following a devaluation of the bolivar in January.

“The government perceives shortages as more damaging than actual inflation,” said Juan Pablo Fuentes, a Latin American Economist at Moody’s Analytics in Philadelphia. “People are used to inflation now, but they get mad when they can’t find goods.”

Consumer prices, as measured by the Caracas price index, rose 2.2 percent in October, the bank said.

To contact the reporters on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net; Charlie Devereux in Caracas at cdevereux3@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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