June 5, 2012 / 3:58 PM / in 6 years

UPDATE 1-Venezuela inflation accelerates to 1.6 pct in May

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CARACAS, June 5 (Reuters) - Venezuela’s consumer prices rose 1.6 percent in May, up from 0.8 percent the previous month in the first increase of the South American country’s monthly rate so far this year, the central bank said on Tuesday.

The South American OPEC member had the highest annual inflation in the Americas last year at 27.6 percent, and economists had expected it to be higher in 2012 due to a pre-election spending bonanza by President Hugo Chavez’s government.

But officials have sought to combat inflation with new price controls on some basic goods including food, health and other sectors from the end of last year.

May’s sharper rise bucked a downward trend after consumer prices increased 1.5 percent in January, 1.1 percent in February, 0.9 percent in March, then 0.8 percent in April. The rise recorded in April was the slowest rate for four years.

Annualized inflation to May was 22.6 percent, the bank said.

Economists have questioned whether the government’s latest price controls will be a sustainable solution for rising prices.

The OPEC nation has in the past suffered from periodic shortages of basic products that businesses attributed to strict state regulations. (Reporting by Daniel Wallis; Editing by Chizu Nomiyama)

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