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Macroeconomic Forecast Venezuela

March 2011 | Macroeconomic Forecasts

BMI View: Following the currency devaluation on January 1, Venezuelan inflation increased from 27.4% y-o-y in December 2010 to 28.9% y-o-y in January, bucking the downward trend that had been in place since August 2010. We expect this uptick of y-o-y inflation to persist in the short term, due to the economy's heavy reliance on imported goods. However, we believe that the government will adopt new policy measures designed to rein in inflation throughout the course of the year, including price caps and subsidies, leading us to project a slight decline in the headline print to 25.0% by end-2011.

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