One has to wonder what happens to people when they become Government officials. I have (had?) a reasonably good impression of the Minister of Production and Commerce of the Chavez administration, at least a better opinion of him than most of the Cabinet members. Rosales is a former Professor of the local MBA school IESA. But today he won the October Maza Zavala economic stupidity award for his statement on inflation in 2002. Said Rosales:
"projections that inflation will reach 35%.....are political, but a number like 26% (for the year) seems reasonable"
Now let's look at the numbers. The Venezuelan Central Bank reported on Monday that inflation for the month of September was up 4.5%, given a total value for accumulated inflation in the year 2002 of 25% . Thus for the Minister's prediction of 26% to become reality, the CPI would have to rise less than 0.3% for three months in a row. Now the lowest monthly CPI in Venezuela for the last four years was 0.4% in February 2000, thus it would seem somewhat difficult for it to be below 0.3% for three months in a row. Moreover, The CPI in September was the highest of the year and the highest in four years, so there is no reason to expect a dramatic drop in the last three months of the year. In fact, if we are benevolent and assume the CPI will be in the last three months similar to the average rise per month this year of 2.5%, then the "political" prediction of 35% becomes a very precise reality.
Now, how can a reasonable intelligent person say what he said? I guess it must be the same "street smarts" that led him to accept the position of Minister in the Chavez Government.....
10:01:18 AM 
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