Venezuela's inflation soars to 63.4 percent,

Venezuela's inflation soars to 63.4 percent

CARACAS, Sept 10, 2014 (BSS/AFP) - Venezuela's inflation rate has soared
to 63.4% -- the highest in Latin America -- the Central Bank announced
yesterday.

It was the first time the figure was announced since May. Critics charge
that President Nicolas Maduro's socialist government has withheld data
for its political benefit.

Maduro's government has applied many measures trying to rein in
inflation, to no avail.

It has imposed mandatory price controls, set limits on commercial space
rents; and even closed the border at night to clamp down on smuggling,
which it
blames for worsening shortages.

Venezuela, which sits atop the world's largest proven oil reserves, imports
96 percent of the goods it needs. Shortages of everyday goods such as toilet
paper, have become common.

Most economists say runaway inflation and shortages are caused by massive
government spending, including overseas; and by exchange rate controls and
price controls in effect since 2003.

That makes many products artificially inexpensive to the point where it is
profitable to smuggle them out to sell in Colombia.

The government has yet to give a GDP forecast for 2014, with the last
projection coming eight months ago, when it predicted growth of four
percent.

Maduro is the closest regional ally of Cuba, the region's only one-party
communist state.

Venezuelan economic support is critical to keeping the Cuban government and
economy afloat.

Cash-strapped Havana still has a centrally planned economy and cannot get
access to international loans. Venezuela supplies it with cut-rate oil worth
billions in exchange for Cuban doctors' contract medical services.

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