Macroeconomic Forecast Venezuela

BMI View: According to the Banco Central de Venezuela, consumer price inflation (CPI) in Caracas fell to 30.0% y-o-y in August from 30.9% y-o-y in July, the lowest rate since March. On a month-on-month (m-o-m) basis, CPI fell to 1.4% m-o-m in August, down from 1.6% in July and 2.0% in June, the slowest pace of prices rises since December 2009. Despite this recent downward trend in Venezuelan CPI, we believe further erosion of productive capacity, and limited access to cheap Colombian imports due to a continuation of the trade embargo will drive inflation towards our 40.0% end-2010 target

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