Venezuela Inflation May Rise to 27%, Rodriguez Says

Venezuelan inflation may accelerate to 27 percent in 2008, above the government's 19.5 percent target, as rising consumer demand continues to outpace supply in the oil exporting economy, Finance Minister Ali Rodriguez said. The government is working to curb inflation, the fastest among the 79 economies tracked by Bloomberg, with policies aimed at boosting productivity, especially in agriculture, Rodriguez said today in an interview at his office in Caracas. ``Venezuela has an income that's several times larger than its productive capacity,'' Rodriguez said. ``At the levels we're at now, we could get to 27 percent inflation, but we're applying measures so we don't get to that level.'' President Hugo Chavez has tapped surging revenue from oil exports to boost government spending on infrastructure and social programs, add workers at state companies and ministries and nationalize private businesses. Rising liquidity helped push up consumer prices 33.7 percent in July from a year earlier. Inflation was 22.5 percent in 2007. Food and drink prices in July rose 49.9 percent from a year earlier, according to the central bank.