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View Diary: The Booming Venezuelan Economy, and how it affects Monte Carmelo (74 comments)

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  •  Inflation (2+ / 0-)
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    Mia Dolan, Rex Manning

    CARACAS, April 8 (Reuters) - Venezuela raised its annual inflation target to 19.5 percent on Tuesday, the latest sign the government has taken a dose of reality in its fight to contain Latin America's fastest consumer price rises.

    Planning Minister Haiman El Troudi raised the target from an earlier goal of 11 percent after revealing that Venezuelan prices rose more than 7 percent in the first three months of the year.

    "The levels of inflation are not what we were aspiring to," El Troudi told reporters.

    Last year, oil-flush Venezuela refused to raise its inflation goal above 12 percent, even as prices surged by 22.5 percent, driven by high government spending in the midst of a fast growing economy.

    •  In other words... (0+ / 0-)

      ...the working class of Venezuela have more money to spend which means more money circulating in the economy.

      Terrible for the lending class. Good for the working class.

      •  Infaltion, part 2 (1+ / 0-)
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        Rex Manning

        If infaltion is good for the working class, why does VZ government seek to limit it at all?

        It's more likely the case that in the short term, inflation can provide a temporary benefit and in the long term, if left uncontrolled, inflation can ruin an economy, working class included.

        The recognition of harm arising from long term inflation would explain why the VZ government is taking steps to reduce the current inflation rates.

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