Inflation in Venezuela Falls 0.4% in February

A 14 percent drop in the price of non-manufactured food helped lead to the biggest monthly decrease in inflation since 1988, according to Venezuela’s Central Bank.

Consumer inflation, which, for Venezuela, is measured in the Caracas metropolitan area, fell overall by 0.4 percent in February, driven down by the 4.0 percent decrease in cost of food.

Prices, which fell overall by 0.4 percent in February, were driven down by the 4.0 percent decrease in cost of food.

Between 2000 and February of 2003, when price controls on some basic foods were implemented, the price of food and non alcoholic beverages had risen 13 percent above the overall rate of inflation, a contrast to previous years, where food prices were rising at 10 percent below the overall rate of inflation.  Since the implementation of price controls, the prices have risen at 3.8 percent below the overall rate of inflation.

Government price controls for basic foods have been controversial, with critics arguing that the controls will lead to food shortages, which have occurred for relatively short periods of time with specific goods. A notable exception was coffee, which was sold out of supermarkets for weeks during a dispute between coffee processors and government which resulted in an increase in the coffee retail price.

After high inflation through the mid 90s, it dropped steadily until the 2002 coup and 2002-3 oil industry shutdown during which inflation was driven up over 30 percent. Since then inflation has been generally decreasing, bringing inflation over the past 12 months to 12.5 percent.