Venezuela - Inflation (end of period)
Inflation balloons as Venezuelans prepare for December elections
The available evidence continues to point to sky-rocketing inflation in crisis-hit Venezuela. Although no official data has been released this year, market estimates indicate that inflation has worsened from December 2014’s 68.5% (the last month for which official data are available) in the first half of 2015. Analysts surveyed by LatinFocus estimate that inflation tallied between 100-130% in May which, if confirmed, would mark a multi-year high. A sharp drop in the price for oil, which accounts for the vast majority of Venezuela’s dollar income, has aggravated dollar and basic good shortages that is fueling inflationary pressures. On top of this, the government maintains a complex system of exchange rates – with the official pegged at 6.3 VEF per USD and large fuel and electricity subsidies which adds pressure on the government’s finances and intensifies dollar shortages. LatinFocus Consensus Forecast panelists see inflation remaining elevated in the coming months and expect inflation to end the year at 115.7%, which is up 6.3 percentage points from last year’s forecast. For 2016, the panel foresees inflation easing to 84.6%.
Against this backdrop, Venezuelans will head to the polls on 6 December in legislative elections. The government’s approval ratings have fallen in recent months in tandem with the worsening economic crisis, and early polls suggest the fragmented opposition is likely to win a majority. In addition, Venezuela’s electoral system has a large majoritarian bias, which increases the possibility that the opposition could win a two-thirds supermajority if the government’s approval rating remains at current levels. A two-third majority would hinder the government’s ability to appoint Supreme Court justices and push-through laws and may even pave the way for a change in government. However, a large amount of uncertainty surrounds the upcoming elections and if the election will be conducted fairly. Moreover, little is known about the opposition’s economic platform and if a change of power would improve the country’s economic crisis.
Venezuela - Inflation (eop) Data
|Inflation Rate (CPI, annual variation in %, eop)||27.2||27.6||20.1||56.2||68.5|
5 years of economic forecasts for more than 30 economic indicators.
Venezuela Inflation (eop) Chart
Source: Venezuela Central Bank and FocusEconomics calculations.
|Bond Yield||5.50||-6.00 %||Jun 19|
|Exchange Rate||6.30||0.0 %||Jul 31|
|Stock Market||15,472||0.0 %||Jul 31|
See all the data and analysis available in each of our Regional and Country reports.
July 14, 2015
In June, the average price of Venezuela’s mix of crude oil recorded zero growth over the previous month, remaining at May’s price of USD 56.4 per barrel.
July 10, 2015
The available evidence continues to point to sky-rocketing inflation in crisis-hit Venezuela.
July 9, 2015
The bolivar traded in the parallel market’s downward trajectory accelerated in recent weeks and fell past 600 VEF per USD, a new record low, on 9 July.
July 8, 2015
Annual car sales rose 73.0% over the same month last year and totaled 1,884 units in June, according to figures from the Venezuelan Automotive Chamber (CAVENEZ, Camara Automotriz de Venezuela).
June 16, 2015
The available evidence points to sky-rocketing inflation in crisis-hit Venezuela.