Macroeconomic Forecast Venezuela

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capital Caracas dropped slightly in January, to 26.3% y-o-y from 29.0% the previous month. However, with M2 money supply growth picking up rapidly towards the end of 2011, from 26.8% y-o-y at the start of the year to 52.9% by the end of December, as the authorities attempt to keep domestic demand elevated ahead of the October 2012 presidential elections, we see little chance of a significant slowdown in inflation anytime soon. For that reason we stick to our end-2012 inflation forecast of 26.0%