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UPDATE 2-Venezuela's November inflation was highest in 16 months
December 4, 2012 / 4:25 PM / 5 years ago

UPDATE 2-Venezuela's November inflation was highest in 16 months

* Rate accelerated to 2.3 percent, highest since July 2011

* Alcoholic drinks and tobacco led rises, up 4.9 percent

By Eyanir Chinea and Marianna Parraga

CARACAS, Dec 4 (Reuters) - Venezuela’s monthly inflation accelerated to 2.3 percent in November, the central bank said on Tuesday, the highest rate in more than a year.

Twelve-month inflation to November was 18.0 percent, while the accumulated rise during the first 11 months of 2012 was 16.0 percent, the bank said.

The biggest price increases were for alcoholic drinks and tobacco, which rose 4.9 percent in November, and for food and non-alcoholic drinks, which rose 3.2 percent.

An expansion of price controls had largely kept inflation in check this year despite heavy state spending that helped President Hugo Chavez win a third term in October elections.

Venezuela has increased imports to keep shelves stocked ahead of Christmas. It recorded inflation of 1.7 percent during October 2012. The last time the monthly rate was higher than in November was during July 2011, when it came in at 2.7 percent.

Venezuela’s annual inflation rate in 2011 was 27.6 percent. The government had set a target of 20 percent to 22 percent for this year but officials now expect it at about 18 percent.

A fall below the symbolic 20 percent level would still leave the OPEC nation with one of the highest rates in the Americas.

Economists warned Chavez’s spending on expansive social programs ahead of October’s vote would fuel price rises and make it more likely that Venezuela would need to devalue its bolivar currency for what would be a fifth time in less than a decade.

Most Venezuelans believe any new currency adjustment would be delayed until after elections for state governors on Dec. 16. Chavez is in Cuba receiving cancer-linked medical treatment, and has not been seen in public for more than two weeks.

State spending has underpinned economic growth this year: the economy expanded 5.2 percent in the third quarter, leaving the government well on track to hit its target of 5 percent.

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