March 14, 2014 / 6:10 PM / 6 years ago

UPDATE 2-Venezuela inflation tops 57 pct amid opposition protests

CARACAS, March 14 (Reuters) - Venezuela’s annual inflation rate rose to 57.3 percent in February, the central bank said on Friday, as violent opposition demonstrations during the month disrupted the economy.

The South American OPEC nation, which has one of the world’s highest rates of inflation, said that despite the protests inflation slowed on a month-on-month basis to 2.4 percent from 3.3 percent in January.

Demonstrators outraged over shortages of staple goods and soaring consumer prices have been staging protests and blocking roads since the middle of February demanding that President Nicolas Maduro resign.

Maduro describes the soaring inflation as the result of an “economic war” led by opposition leaders and supported by ideological adversaries in Washington.

“These results came in the context of the economic war ... which had consequences for the distribution of consumer goods, limitations on the workday, and restriction of the hours of operation of commercial establishments,” the bank said.

The cost of recreation and health services both jumped 4.1 percent from January, while the cost of restaurants and hotels rose 3.9 percent.

Opposition leaders say the economic problems show the state-led economic model pioneered by late socialist leader Hugo Chavez has run out of steam.

Venezuelans have for months been struggling to find basic consumption items including cooking oil, toilet paper, and flour, which has in the past weighed on the president’s popularity ratings.

The bank’s scarcity index, a measure of product shortages, jumped to a record 28 percent in January. The bank’s press release on Friday did not include the figure for February.

Businesses say the shortages are caused by a combination of currency controls that prevent them from importing raw materials and price controls that at times force them to sell goods below their cost of production.

The current wave of protests, which have slowed food deliveries and forced many businesses to close, may turn public opinion against the opposition and help Maduro deflect criticism over the economic problems.

A primary driver behind inflation is the torrid expansion of the money supply that vastly outstrips the pace of economic growth. Liquidity grew close to 70 percent in 2013 despite economic growth of just 1.6 percent, and the money supply has doubled since November 2012.

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