The Venezuelan Central Bank published yesterday July's price inflation numbers, which turn out to be very very bad, despite the attempts by the bank to hide reality with word games.

So, first let's see the numbers: July National Consumer Price Index (INPC) rose by whopping 1.9%; half a point lower than June's increase (2.4%), but 1.4% higher than July last year. During the first seven months of 2008 the accumulated inflation rate already reaches 17.3% (only 2% below the full year government target of 19%); which compares very badly with the 8.3% accumulated during the first 7 months of 2007. Year over year the inflation rate for July is 33.7%; the third consecutive month the annualized inflation rate breaks the 30% mark.

Now, let's see what the Central Bank told Venezuelans in its press release, which tries in vain to make reality vanish. Let's start with the title: For second straight month, the INPC registered a decelerated behavior in its change rate. Partially true, the INPC grew at a slightly lower pace than in June, but it is also true and this you will find nowhere in the BCV's press release, that for the third straight month annual inflation is over 30%. You can see the data for yourself if you wish, in May YoY inflation was 31.5%; in June it was 32.2% and in July it was 33.7%. Now, that doesn't sound like a deceleration to me, does it?

In the press release you will not find any reference to last year's numbers. What for? It seems they think that if you don't mention that the economic toy of Hugo Chávez, the "Bolivar Fuerte" ("Strong Bolívar"), is loosing value at an annual rate of 33%, the people will not notice it. But of course the people notice it every time they go to the grocery stores and that's why last year witnessed record capital flights out of Venezuela, with nearly 19 billion US$ leaving the country for safer havens.

I would bet this year will break this record again, no matter how much the central bank tries to disguise its failure in controlling inflation.

 Venezuela