Macroeconomic Forecast Venezuela

According to the Banco Central de Venezuela, the South American state's consumer price inflation fell from 32.0% y-o-y in May to 31.8% in June. Despite this recent decline in CPI, we maintain our 40.0% projection by end-2010 as we believe that chronic food shortages and further erosion of productive capacity will continue to drive prices higher. Indeed, from a month-on-month perspective, inflation increased by 2.0% from May to June, and year-on-year wholesale inflation also rose, from 28.2% to 28.6% over the same period.

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