UPDATE 1-Venezuela's annual inflation hit 42.6 pct in July

Tue Aug 6, 2013 1:58pm EDT

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CARACAS Aug 6 (Reuters) - Venezuela's annual inflation rate hit 42.6 percent in July, one of the highest levels in the world, even as the month-on-month rise of consumer prices slowed to 3.2 percent, from 4.7 percent in June, the central bank said on Tuesday.

The rise in the yearly rate follows a currency devaluation in the OPEC nation and heavy state spending last year. It is the highest annual figure since 2008, when the central bank changed the methodology it uses to calculate inflation.

The increase in July, which takes accumulated inflation to 29.0 percent for the first seven months of the year, was spurred by a 6.4 percent jump in transport costs and a 4.9 percent rise in the cost of clothing and footwear.

The devaluation of the bolivar currency in February, and heavy state spending in 2012 when the late socialist leader Hugo Chavez won re-election, have exacerbated price pressures in Venezuela, which has suffered from high inflation for decades.

The opposition says President Nicolas Maduro and the late Chavez have led the country into a dire economic situation.

The government's supporters, meanwhile, point to advances in social welfare thanks to the state's spending of oil revenue on programs such as free health services and subsidized groceries.

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