Venezuela inflation rises to 17 percent in 2006
«Venezuela's inflation rose to 17 percent last year from 14.4 percent in 2005 as spending power in the OPEC heavyweight was fueled by bumper oil earnings, the central bank said on Tuesday.
The price rises hit the poorest the hardest, as food and non-alcoholic beverage prices rose 26 percent. December consumer prices rose 1.8 percent over November, comfortably outstripping the 0.8 percent rise posted in the same period the year before.
"The acceleration of inflation is at this stage the major macro issue facing the government," said a Goldman Sachs analysts' note, predicting that 2007 inflation would be in the 15-17 percent range. (...)
Venezuela posted economic growth of 10.2 percent in the third quarter, driven by high crude prices and heavy government spending. President Hugo Chavez boosted minimum wages twice last year and expanded welfare programs that shored up his popularity. He was re-elected in a landslide last month.
Loose fiscal and monetary policy has increased the volume of bolivars in circulation, spurring on the highest inflation in the Americas. Liquidity surged around 60 percent in the year to May.»