Macroeconomic Forecast Venezuela

BMI View: Preliminary figures released by the Banco Central de Reserva de Venezuela put inflation at 27.6% for 2011, slightly lower than our 29% estimate. We forecast inflation to remain elevated in 2012 on the back of the government's expansive fiscal and monetary policies which contributed to 60.4% y-o-y growth in M2 in November 2011. We also expect the government to step up fiscal expenditures in 2012 in advance of the October 2012 presidential elections, further exacerbating inflationary pressures in line with our forecast for 26.0% inflation in

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