Venezuela Inflation Rises Less Than Expected After Devaluation

Venezuelan consumer prices rose less than expected last month as a devaluation of the bolivar in February failed to have the immediate impact on prices that many analysts had anticipated.

Prices rose 1.6 percent from January, the central bank said today, compared with the 3.2 percent median estimate of six economists in a Bloomberg survey. The nationwide inflation rate reached 22.8 percent, the highest in ten months.

The government of former President Hugo Chavez, who died March 5 following a two-year battle with cancer, devalued the bolivar by 32 percent on Feb. 8. Many stores are still selling imports they bought at the previous exchange rate and haven’t lifted prices to reflect the new rate. Food prices, which account for 37 percent of the inflation index, climbed 0.4 percent in February, the central bank said.

“The effects of exchange rate adjustments will begin to be felt strongly starting in March, with strong rises in food, clothing and electronic equipment prices,” Asdrubal Oliveros, director of consultancy Ecoanalitica, said by phone from Caracas today. “Devaluation effects were largely absent in February statistics.”

Home appliance prices rose 2.4 percent last month, while restaurant and hotel costs increased 3.9 percent, the central bank said. Consumer prices in the capital Caracas gained 1.4 percent in February.

The scarcity index, which measures the amount of goods that are out of stock on the market, fell to 19.7 percent last month from a high of 20.4 percent in January, according to the central bank report.