Venezuelan inflation trebles compared to the rest of ALBA countries

The Central Bank of Venezuela (BCV) welcomed the fact that inflation in January ended at 1.5%. However, this result is much higher than the inflation reported in the rest of the member countries of the Bolivarian Alliance for the Peoples of Our America (ALBA), with which Hugo Chávez's administration aims at increasing trade relations.

Nicaragua's inflation rate stood at 0.13% in January, while it was a little higher in Bolivia (0.30%) and Ecuador (0.57%).

In 2011, Nicaragua's inflation rate was 7.95%; while Bolivia and Ecuador reported lower inflation rates, 6.90% and 5.41%, respectively. Meanwhile, Venezuela's inflation hit 27.6%.

Venezuelan financial authorities have set the annual inflation goal this year at 20%- 22%. Meanwhile, all indications are that Bolivia, Ecuador, and Nicaragua will keep inflation at a single digit.

The combination of a fixed exchange rate and an inflation rate higher than the rest of the ALBA member countries, Latin American nations and the United States means that the Venezuelan currency is overvalued. This imbalance pushes up imports and stops Venezuelan companies from exporting products.

Meanwhile, the central bank has said that it is developing "a coordinated strategy to curb inflation" along with the Ministries of Planning and Finance, Industry, Agriculture, Trade, Food, and Science and Technology.

The taskforce is using methods such as "an early warning system, strategies to increase domestic agricultural production, and the design and implementation of dynamic and transparent monetary policies."