Venezuela's Planning Minister seeks joint action to beat price rises as inflation threatens

Caracas Daily Journal (Jeremy Morgan): Planning and Development Minister Haiman El Troudi called on all sides for joint action to stem resurgent inflation after consumer prices leapt by 3.2 percent last month alone. Neither the minister nor the Venezuelan Central Bank (BCV) issued an annual rate of inflation. Unofficial estimates suggested 2008 looked like hitting 30 percent. El Troudi's revised inflation target of 19.5 percent for the year is looking increasingly hard to hit.

And with prices rising by a cumulative 12.4 percent since the turn of the year, inflation is already beyond the original 2008 budget target of 11 percent, which economists said looked unachievable from the start.

“The structural solution to the problem of volatility of prices of products is associated with the increase in supply, that's to say, the incorporation of the productive sectors in a more intense dynamic of generating goods and services,” El Troudi said. “It's important to incorporate the consumers in a campaign that allows us to mobilize ourselves against the speculative increase in prices,” he added. “Much of what's happening with the variation in prices is related to speculation.”

The BCV issued a statement about “an agenda of actions” by representatives of producers and consumers to “abate inflation” -- but just what officials had in mind remained unclear. The idea of a grand alliance against raging price rises is by no means new, least of all in inflation-prone Latin America. It's been tried lots of times, usually without success because of the conflicting interests of those involved.

President Hugo Chavez' biggest problem is the business community ... it has repeatedly urged him to make drastic changes before the economy unravels in an inflationary spiral.