MercoPress. South Atlantic News Agency

Venezuela and Argentina have the highest inflation rates in South America

Food and energy are the items with the greatest impact on consumer prices

Venezuela and Argentina recorded the highest rates of inflation in South America during the first quarter of 2011 according to the latest data available.

In Venezuela it was the government statistics office that reported a 6% increase for the period January-March, while in Argentina, 5.6% is an accepted average from private consultants since the official data is ignored domestically and questioned internationally.

The strong hike in world food prices accelerated consumer prices indexes in most South American countries, although the average for the region is slightly above 1%.

In Venezuela March’s inflation actually suffered a minor ease, from 1.7% in February to 1.45 in March, but accumulating 6% that is above the 5.8% of last year’s first quarter.

In Argentina inflation took off in January with 2%, February was down to 1.5% and March again 2% with forecasts for the rest of the year not very encouraging since most private economists anticipate an annual rate of 25%, similar to 2010, although much will depend on new labour contract negotiations and the monetary policy in an electoral year.

These two countries differ significantly from Brazil, Chile and Colombia. In South America’s largest economy, first quarter inflation reached 2.5% and the 12 month estimate is 5.8%. In Chile there’s concern with food and fuel prices but the first three months inflation stood at 1.3% while in Colombia the figure was 1.8%.

In Uruguay March’s inflation soared to 1.42%, the highest monthly increase since 1996, but the 2011 quarter stands at 3.6% and the government has adopted monetary and fiscal measures.

Bolivia and Paraguay have first quarter consumer prices indexes records of 3.9% and 4.8%, while in Ecuador inflation seems under control since the first three months of the year accumulated 1.3%. In Peru the situation also seems under control, 1.5% in spite of the uncertainties about the presidential run-off next June.