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June in Detail
There was a decrease in the National Retail Price Index, and the positive variation of the currency cash flow remained stable. Changes are expected in the macro variables as a result of the proximity of the school holidays.

Author: Litsay Guerrero

Caracas, July 19th 2012.-

Based on figures from the Central Bank of Venezuela (BCV) and the National Institute of Statistics (INE), the National Retail Price Index registered an inter-monthly variation of 1.4%, which is a greater figure than the one registered in May 2012, and less than the one registered in June 2011 (2.5%).

PRICES

The National Retail Price Index registered in June 2012 a variation of 1.4 compared to the previous month (May 2012 - 1.6%), which is a lower result than the one registered in June 2011 (2.5%). the annualized inflation is 21.3%, which is a lower result than the one registered in the same period of the year 2011 (23.6%).






























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Source: Central Bank of Venezuela (BCV)

The groups that showed price acceleration were:

  • Transport, from 2% to 4 %


  • Home Equipment, from 0.6% to 1.2%


  • Education Services, from 0.5% to 0.8 %


  • Alcoholic beverages and Tobacco, from 1% to 1.2 %


  • Restaurants and Hotels, from 2.6% to 2.7 %


  • Clothing and Footwear from 0.7% to 0.8 %

In turn, the groups showing price deceleration were:

  • Food and Non-alcoholic Beverages, from 1.7% to 0.8 %


  • Home Rental, from 1.1% to 0.7 %


  • Home Services, exempting Telephone, from 1.5% to 1.1 %


  • Communications, from 0.3% to 0.1 %


  • Recreation and Culture, from 0.7% to 0.6 %

The categories of: Diverse Goods and Services, and Health, showed the same inter monthly variation that in the month of May 2012 (0.7% and 1.6% respectively).






























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Source: Central Bank of Venezuela (BCV)

Taking into consideration the annualized variation, meaning June 2012 compared to June 2011, the groups showing a greater increase were: Restaurants and Hotels (28%), Food and Non-Alcoholic Beverages (27.2%), Alcoholic Beverages and Tobacco (24.3%); Education Services (23.7%), transportation (22.1%);

Regarding the cities, out of the 13 domains that were taken into consideration for the price analysis, by the Central Bank of Venezuela (BCV), the ones showing greater variation, in general terms, compared to the previous months were: Valencia, from 1.9% to 1.2%; Maracay, from 1.9% to 1.4%; Barcelona - Puerto La Cruz, from 1.1% to 0.6%; Merida, from 1.4% to 1.0%; San Cristobal, from 1.4% to 1.2%; The rest of the country, from 1.4% to 1.2%; Ciudad Guayana, from 1.2% to 1.1%; and Caracas from 1.6% to 1.5%. The city of Barquisimeto was the single domain to register greater variation in prices compared to the previous month (from 1.3% to 2.4%); while the cities of Maracaibo and Maturin recorded the same variation as in May (1.8% and 2.1% respectively).

The Core Inflation1 showed a variation of 1.6%, result lower than that recorded in the previous month; according to the information provided by the Central Bank of Venezuela (BCV). In may 2012, the category of Services recorded a slight decrease (from 2.2% to 2.1%), while the categories of Non-energetic Industrial Goods, and Textiles and Clothing recorded a slightly greater variation, compared to than the month of May 2012 (1.1 to 1.2%; and 0.7% to 0.8%; respectively); whereas the Processed Foods category recorded equal variation than in the previous month (1.5%).






























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Source: Central Bank of Venezuela (BCV)

Compared to the month of June 2011, date to which the core Inflation recorded a variation of 2.3%, the index showed lower result for the month of May 2012 (1.9%). Components, three groups recorded one variation of the minor with respect to registered in June 2011: processed foods (- 1 percentage point), non-energy industrial goods (- 0.4 percent); Textiles and clothing (- 0.5 percentage points). The category of Services recorded greater variation compared with the month of June 2011 (0.1 percentage point).






























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Source: Central Bank of Venezuela (BCV)

UNEMPLOYMENT

For this edition we have the figures of the unemployment rate published by the National Institute of Statistics (INE) for June 2012, which stood at 7.4%; the result is less than the figure recorded in the previous month in 2012.






























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Source: National Institute of Statistics, (INE)

EXTERNAL SECTOR

OIL

In the month of June 2012 the oil prices in average, recorded a decrease compared to the month of May 2012, all together the baskets were appraised 13.49% less. The OPEC basket closed in June at 94,37 US$/barrel, 13% lower than the previous month. In turn, the WTI basket closed at 82.46 US$/barrel, 13.5% less than the previous month, and the Brent basket was placed in May 2012 at 96.13 US$/barrel, 13.4% lower than at the end of April. The Venezuelan basket registered for June this year a monthly price of 90.88 US$/barrel, which is a 13.8% lower result compared to the previous month.






























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Source: Menpet

According to information published by the Ministry of the Power of the People for Oil (Menpet), the behavior of oil prices for the month of June was influenced by:

  • The behavior of the Economic activity in China and United States, and their possible effect on the global demand of oil.


  • Availability of crude oil.


  • Expectations before the development of the financial crisis in the euro zone.

International Reserves

According to the information published by the Central Bank of Venezuela (BCV), by the last business day of the month the International Reserves registered preliminarily, 28.391 Millions of US$. This result is 9.68% higher at the end of the month of May 2012. Out of that total, US $ 28.388 million correspond to reserves in the Central Bank of Venezuela (BCV) and US $ 3 million correspond to reserves deposited in the FEM.






























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Source: Central Bank of Venezuela, (BCV)

FINANCIAL SECTOR

Currency Cash Flow

For the closure of the last week of the month of June 2012 the currency cash flow increased by 4.3% compared to the last week of the month of May, to be located in 520.087.952 thousand bolivars.






























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Source: Central Bank of Venezuela, (BCV)

Interest Rates

For the month of June 2012 the lending interest rate stood at 16.35% (3% less than the rate for the month of May) while the interest rate for 90 days deposits ranked at 14.50% (figure equal to that recorded in the previous month).






























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Source: Central Bank of Venezuela, (BCV)

Caracas Stock Market Index IBC

The Caracas stock market index, which shows the capitalization of the transactions of a sample of 17 titles without discrimination of economic activity, introduced a variation of 5.19% in May, compared with the previous month.






























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Source: The Caracas Stock Market

The results of the indicators in the month of May show that the expectations remain the same concerning the behavior of the global economy facing the development of the crisis in the Euro Zone; as well as the behavior of the economic activity in the United States and China. It is expected that these elements will continue in the short term marking an impact in terms of the demand and oil prices.

According to the Central Bank of Venezuela (BCV), in the domestic scenario, a decrease was recorded in the National Retail Price Index in June, compared to the results of the previous month. The positive variation of the currency cash flow remains stable, with greater magnitude than the one recorded in the previous month despite the slight increase in the interest rates, it remains within the average of the first three months of 2012. In the short term it is expected that the macro variables remain stable, with some variations of prices as a result of the proximity of the school holidays.

ANNOUNCEMENTS AND ACTIONS TAKEN BY THE NATIONAL GOVERNMENT IN THE ISSUE OF ECONOMY

  • The Resolution from the Superintendence of the Banking Sector Institutions was published in the Official Gazette N° 39.936 of June 4, 2012. It authorizes the operation of SOGATUR, S.A. (Association of Reciprocal Guarantees for the Micro, Small and Medium Businesses of the Tourism Sector)


  • The resolution of the Ministry of the Power of the People for Commerce (Mincomercio), which was published in Official Gazette No. 39,938 dated June 06, 2012 sets the new price regulation for the Service Provision of Parking or Public Garages.


  • The Ministry of the Power of the People for Food (Minpal) established through the corresponding Resolution, the guidelines and criteria governing the release of the Guide of Mobilization, Follow-up and Control, within the national territory, of Conditioned Raw Materials, and Conditioned Food Products, whether processed or completed, intended for marketing, human consumption, and animal consumption with direct impact on human consumption. O.G. 39,938, dated June 06, 2012.


  • The resolution of the Ministry of the Power of the People for Tourism (Mintur), published in the Official Gazette N° 39.938 on June 07, 2012, established the requirements and technical and legal documents for the processing of the administrative acts issued by that Ministry.

  • Through the Official Gazette N° 39,938 dated June 07, 2012 the Inter-institutional Cooperation and Assignment Treaty, agreed between the Venezuelan Food Corporation, S.A., (CVAL) and Empresa Comercializadora de Insumos y Servicios Agricolas, S.A.(Trading Company of Inputs and Agricultural Services), for the consolidation of Empresa Nacional de Proyectos Agrarios, S.A. (National Company of Agricultural Projects, S.A.)


  • The Superintendence of Institutions of the Banking Sector (Sudeban), through the corresponding Resolution "Limits the Placement of Resources in Trust, Agreed with Insurance and/or Reinsurance Companies". G.O. 39,941 of June 11, 2012.


  • The "Norms Regulating Operation of Trusts" were established through the relevant Resolution of the Superintendence of Banking Sector Institutions (Sudeban). O.G. 39,941 of June 11, 2012.


  • The Superintendence of the Insurance Activity (Sudeseg) established the general and uniform approval of the General Conditions of the Bail Contract with the State-Owned Companies, through the relevant Providence. O.G. 39,941 of June 11, 2012.

  • The Joint Resolution of the Ministries of the Power of the People for Land Transportation (MTC), Justice and Internal Affairs (Mpprij) and Commerce (Mincomercio) regulated the maximum nationwide rate for the Service of Land Transportation of Passengers, to be charged by the Organizations of the Public Service of Land Transportation of Passengers on Intercity Routes, and the nationwide maximum rates the national level of the public service of land transport of passengers to be charged by the Organizations of the Public Service of Land Transportation of Passengers in the Suburban Routes. O.G. 39,941 dated June 11, 2012.


  • The Presidential Decree N° 9.034, authorized Corporación Venezolana del Cafe, S.A., to create a subsidiary State-Owned company, in the form of a limited company, called "Cafe de Venezuela Tiendas y Servicios. S.A." (Coffee of Venezuela Shops and Services), which will be under their control and attachment. O.G. 39,942 of June 12, 2012.


  • The Central Bank of Venezuela (BCV) through the Official Gazette N° 39,943 of June 13, 2012 published the interest rates applicable to the obligations arising from the employment relationship, interest rates for the acquisition of vehicles under the balloon payment modality, interest rates for transactions with credit cards, and interest rates for credit operations destined to the tourism sector.


  • The Presidential Decree No. 9,041 issued the Decree with Rank, Value and Strength of Organic Law of Public Goods. O.G. 39,945 of June 15, 2012.

  • The Presidential Decree N° 9,044 announces the Decree with Rank, Value and Force of the Organic Law of Tourism (see N° 6,079 extraordinary Official Gazette of the BOLIVARIAN REPUBLIC OF VENEZUELA, of the same date). O.G. 39,945 of June 15, 2012.


  • The Presidential Decree No. 9048 issued the Partial Reform of the Decree with Rank, Value and Force of the Law of Housing and Habitat Provision System. O.G. 39,945 of June 15, 2012.


  • The Presidential Decree N° 9,049 announced the Decree with Rank, Value and Force of the Law for the Attention to the Agricultural Sector. O.G. 39,945 of June 15, 2012.


  • The Presidential Decree No. 9,050 announced the Decree with Rank, Value and Force of the Law for Determining the Fair Price of Immovable Property in cases of emergency expropriation for purposes of settlement and habitability. O.G. 39.945 dated June 15, 2012


  • The Presidential Decree N° 9,051 announced the Decree with Rank, Value and Force of the Law on Access and Exchange of Electronic Data, Information and Documents between the bodies and organisms of the State. O.G. 39,945 of June 15, 2012.


  • The Presidential Decree N° 9,052, announced the Decree with Rank, Value and Force of the Law that promotes and regulates the new associative joint forms between the State, the community and private initiative for the development of the national economy. O.G. 39,945 of June 15, 2012.

  • The Presidential Decree No. 9,053, announced the Decree with Rank, Value and Force of Special Law of the National Fund of Social Benefits. O.G. 39,945 June 15, 2012.


  • The "I exceptional Plan for the Acquisition of Goods, Provision of Services and Execution of Works required for the Development of Small and Medium Industries, and Social-productive Organizations, within the framework of the Purchases of the State of 2012, was approved through the Presidential Decree N° 9054." (See the extraordinary N° 6,080 OFFICIAL GAZETTE OF THE BOLIVARIAN REPUBLIC OF VENEZUELA, of the same date of the same date). O.G. 39,947 of June 19, 2012.


  • The Presidential Decree No. 9,062 authorizes the creation of a State-owned company, in the form of a Corporation, named "Complejo Siderúrgico Nacional, S.A." (National Steel Complex), attached to the Ministry of the Power of the People for Industries. O.G. 39,947 of June 19, 2012.


  • The Ministry of the Power of the People for Agriculture and Lands (MAT), through the corresponding Resolution, issued the Technical Regulations Standards of Law to regulate the Sharks Capture, Exchange, Distribution, Trade, and Transportation. O.G. 39,947 of June 19, 2012.

  • The guidelines and criteria governing the issuing of the Guide for the mobilization, follow-up and Control of conditioned raw materials, and transformed or finished conditioned food products, intended for marketing, human consumption and animal consumption with direct impact on human consumption, was established through the corresponding Resolution of the Ministry of the Power of the People for Food (Minpal) within the national territory. O.G. 39,949 on June 21, 2012.


  • The Joint Resolution of the Ministries of Power of the People for Agriculture and Land (MAT), Defense (Mindefensa) and Internal Affairs and justice (Mpprij), established the temporary waiver from the permission for the transportation of mineral or chemical fertilizers, to those carriers providing service to companies, associations or institutions producing or marketing fertilizers in the country. O.G.: 39,950 dated June 22, 2012.


  • The Providence of the Venezuelan Institute of Social Security (IVSS) published in the Official Gazette No. 39,954 dated June 28, 2012 the decision of the Board of Directors of the aforementioned Institute, that they had agreed unanimously to authorize the issuance of the Electronic Certificate of Solvency, and the Proof of the Employer's Status, only through the Web Portal therein indicated. (www.ivss.gob.ve).

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(1) The Core Inflation shows the variation of the following groups: Processed Foods, Textiles and Clothing, Non-Energetic Industrial Goods, and Services, with the purpose of establishing a measure that would exclude the volatile elements that affect the economic activity and the monetary policies. Likewise, it allows the observation of the atypical fluctuations of the groups that forms the National Retail Price Index.

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