Inflation in Venezuela during last year reached 27.6%, which is 0.7 percentage points more than in 2010, according to a preliminary report from Venezuela’s central bank. President Nelson Merentes said that the consumer prices index “was associated to the upwards pressure generated on wholesale prices by a greater dynamism from domestic aggregate demand”.
Merentes added that the consumers’ index was also influenced by the foreign exchange rate fluctuations, higher international food prices and the increase in port levies, among other factors.
Nevertheless the Venezuelan economy showed a strong performance in most productive activities which make up the GDP.
“Preliminary estimates from the bank indicate that GDP expansion was 4%, double the original target, which was boosted by the non oil sector, (4.3%) and the hydrocarbons recovery, (0.6%).
In the non oil sector the strong performance of goods and services (6.6%), services in health and education promoted by the Government (5.3%) and manufacturing (3.5%) were decisive.
“All these activities (goods and services trade; government services and manufacturing) concentrate 36.4% of productive activity and together make up 1.8% of the overall 4% expansion, adds the central bank’s release.
One of the sectors which had a significant rebound was construction (3.4%), which can be attributed to the boost from the ‘Great Mission: Housing for Venezuela’, a plan sponsored by the government to build homes.
Finally the report points out that economic recovery in 2011 was favoured by the improvement of the power crisis which had a negative impact on production sectors in 2010; an increase in the supply of foreign currency and a boost in government investment in public works.