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Venezuela Fights Inflation
Strategies of the government of
Venezuela to control evolution
of the Consumers Price Index
face the challenge of an
accumulated 10.4 inflation
between January and August,
likely to close near 15 percent
in 2006, according to National
Assembly Finance Committee
Chairman Rodrigo Cabezas.
After 11 straight quarters of
increase, authorities see
inflation as a major challenge
to halt the increase of the
value of goods and services.
The situation concerns President
Hugo Chavez, who suggested
drawing up a plan to halt the
elevated CPI.
To accomplish that goal, the
government decided to curtail
the VAT (sales tax) by one
percent, to be effective October
1. That measure will take the
VAT to 13 percent, allowing
consumers to pay less for goods
and services, and reduce the
inflation rate between 0.6
percent and 1 percent, according
to experts.
However, the predicted 10
percent inflation is unlikely to
materialize.
Inflation in Venezuela came in
at 14.4 percent in 2005.
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