Macroeconomic Forecast Venezuela

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Consumer price inflation reversed its six-month downtrend in April, rising to 29.4% y-o-y from 28.5% y-o-y in March. We believe that this rise in inflation represents a return to the longer-term uptrend. Although we are sticking with our end-2009 target of 40.0%, the current conditions are turning increasingly ripe for a hyperinflationary bust and we are revising our end-2010 forecast from 31.0% to 50.0%.