March 3, 2006
Venezuela February consumer prices fell 0.4%

(Bloomberg) - "Venezuelan consumer prices fell in February for the first time in 18 years as growing supplies of vegetables such as onions, tomatoes and carrots drove down food costs.

Prices fell 0.4 percent in the month, the first drop in prices in the South American country since March 1988, the central bank said in a statement on its Web site. The decline in prices trimmed Venezuela's annual inflation rate to 12.5 percent in February from 13.1 percent in January, the central bank said.

The central bank expects inflation to slow to between 11 percent and 12 percent this year from 14.4 percent last year.

The government has maintained the bolivar's exchange rate at 2,147.3 per dollar since March 2005, helping damp increases in the price of imports. Venezuela imports about 60 percent of its food, medicine, clothing and electronic goods.

The government sets the price of many basic foods, such as meat, pasta and milk, and has not allowed telephone and electricity utility to raise prices since January 2003. Prices of food and non-alcoholic drinks fell 3.8 percent in February, the bank said. Consumer prices rose 0.2 percent in February 2005".