Wednesday, September 10, 2014

Venezuelan Central Bank blames Economic War

The Venezuelan Central Bank (BCV) has released its log delayed report on inflation for the last three months. Inflation in June reached 4.4%, 4.1% in July, and 3.9% in August. Inflation since January has reached 39%, and 63.4% since this month last year.

Analyst Luis Vicente Leon says the BCV is reporting reliable data, but presenting it in a biased form: “The data from the BCV is adequate. The problem is the manipulation of the dates of publication and the bias of the analysis.”(@luisvicenteleon)

This is what the BCV has to say in its report:

“In short, the monthly variation of the Consumer Price National Index slowed down in August for the third consecutive month, thus reaching the lowest level observed since March, when the results of the indicator began to be affected by the political conflict induced by the economic war, which obstructed the normal behavior of productive activities, and the distribution of essential goods demanded by the Venezuelan population.”

In its previous report issued in April, the BCV had already blamed inflation on the Economic War. In that report the BCV subscribed the government’s explanation of events and claimed that “…a radical group from the opposition, guided by its urge to gain power by any means, without consideration for constitutional order or the will of the people, did not doubt putting into action various initiatives to generate political destabilization, promote political tensions, produce a climate of chaotic political and of economic unease that would stimulate social insurrection, and even provoke the intervention of their foreign allies.”

Update September 11: In this article for Prodavinci, Luis Vicente León says that “errors, omissions, and recalculations reasonably weaken the credibility of the [BCV] data for the markets.” 

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