The South American nation had the highest inflation in the Americas last year at 27.6 percent, and analysts expect it to climb in 2012 due to a pre-election spending bonanza by President Hugo Chavez's government. January's inflation was "not only significantly better than the previous month of 1.8 percent and January 2011 of 2.7 percent, but also is the best result of the last eight months," the central bank said in a statement. Price increases were led by alcoholic beverages and tobacco, which rose 3.3 percent, and food and non-alcoholic beverages, which went up 2.0 percent, the bank said. Annualized inflation through January reached 26 percent. Prices often rise in November and December in Venezuela as workers spend state-mandated Christmas bonuses, resulting in inflation frequently slowing in January. The high cost of living is a big factor for voters ahead of presidential elections in October, when Chavez will seek another six-year term.