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Venezuelans Rush for TVs on Devaluation as Colgate Sees Net
Hit
Daniel Cancel and Jose Orozco
Bloomberg
Tuesday , January 12th, 2010
Venezuelan consumers are rushing to buy flat screen
televisions before prices jump, while U.S. companies including
Colgate-Palmolive Co. brace for profit declines after President
Hugo Chavez devalued the currency.
Shoppers picked through half-empty shelves at the Game-Zone
electronics store in Caracas yesterday after a surge in demand
drove up sales 70 percent over the weekend, said salesman Xavier
Manrique. Colgate, the world’s largest toothpaste-maker,
forecast a charge of up to 6 cents a share each quarter this
year and Clorox Co., the biggest bleach maker, said it expects
as much as $30 million in Venezuelan currency-related losses.
Chavez’s threats to seize businesses that raise prices
following the first devaluation in five years may deepen shortages
by making companies hesitate to restock, said Juan Pablo Fuentes,
an economist at Moody’s Economy.com. He forecasts inflation
could reach 60 percent, the highest since 1996 and more than
double the government’s forecast.
“It’s going to be a tough year,” Fuentes
said in a telephone interview from West Chester, Pennsylvania.
“The devaluation has an immediate impact on consumers.
You’re going to see a sharp contraction in consumption,
which is the main driver for GDP.”
Full
article here
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