* Price controls helped keep inflation in check
* Currency devaluation seen spurring inflation in 2013
CARACAS, Dec 29 (Reuters) - Venezuelan inflation reached
19.9 percent in 2012, the central bank said in a preliminary
estimate on Saturday, beating its official target thanks to
strict price controls that business leaders say are
unsustainable in the long term.
The government of President Hugo Chavez has capped prices
for a wide range of consumer goods, helping contain inflation
that has traditionally been the highest in Latin America. The
2012 target had been between 22 and 25 percent.
But inflation is seen accelerating in 2013 because Venezuela
is expected to devalue the bolivar currency after heavy campaign
spending this year that helped ensure Chavez's re-election.
Devaluing eases fiscal pressure on the government by
providing more bolivars for each dollar of crude exports, but
also pushes up the cost of importing basic consumer goods that
are not produced in the oil-dependent country.
In late 2011, when prices rose 27.6 percent, the government
began extended a system of controls that now regulate prices of
products ranging from deodorant to meat while fixing profit
margins.
This helped keep prices in check in an election year despite
heavy government spending on welfare programs ranging from
construction of homes for the poor to monthly cash stipends for
single mothers.
But business leaders say the controls have kept prices
artificially low, and that inflation is likely to bounce back.
Authorities on Thursday released preliminary estimates
showing the country's economy grew 5.5 percent in 2012, with the
construction sector among the fastest-growing thanks to a state
homebuilding program.