Venezuela Extends Price Controls Amid Rising Inflation

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23 November 2011

Hugo Chavez in photo from 21 November 2011
President Chavez announced price
controls via a state TV address.
The Venezuelan government extended price controls to 18 products in a bid to curb the country's 27% inflation rate. In a state television address, President Hugo Chavez announced a price freeze to “protect people from capitalism” and prevent “the big monopolies, the big trans-nationals and the bourgeoisie [to] dominate and ransack the people.” Meanwhile, critics of President Chavez say high levels of public spending and currency controls are the factors contributing to inflation. The government first introduced price controls on food staples in 2003.
Source: http://www.bbc.co.uk/news/world-latin-america-15850784
(Reliability: 9.0)

Comment: The extended economic measures by the Venezuelan government come less than a year before the October 2012 presidential elections. President Chavez’s latest price control initiative is likely to cement his popularity among the lower classes as he prepares for an unprecedented fourth term in office. On the other hand, the same measures are likely to deepen the social divide between rich and poor by alienating businesses and Venezuela’s elite classes. According to Venezuela’s Central Bank, inflation for October 2012 was at 26.9%, currently the highest in Latin America. 

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