Venezuela Inflation


Venezuela: Inflation ends 2014 at highest rate since 1996

February 13, 2015

Consumer prices in December rose 5.29% over the previous month, which was above the 4.66% rise tallied in November. December’s increase mainly reflected higher prices for alcoholic drinks and tobacco, restaurants and hotels, as well as for food and non-alcoholic drinks.

Annual inflation ended 2014 at 68.5% in December (2013: 40.6%). The figure marked the highest inflation rate since 1996. The Central Bank did not publish figures for core inflation or the scarcity index.

Since November of 2013, the Central Bank of Venezuela—once believed to be one of the most reliable institutions in the country—has routinely delayed releases on economic data. According to the Central Bank’s regulations, inflation data should be published within the first 10 days of each month. This situation has led many analysts to suspect that the government has increased its pressure on the Central Bank, which would threaten the Bank’s independence and objectivity. Analysts’ suspicions have been partially substantiated by the unusual nature of the Central Bank’s press releases, which contain a strong ideological and pro-government tone rather than that of a technical analysis.

Per its 2015 budget, the Venezuelan government expects inflation to range between 25.0% and 30.0% in 2015. LatinFocus Consensus Forecast panelists, however, expect inflation to reach 66.3% by the end 2015, which is down 0.2 percentage points from last month’s forecast. In 2016, the panel sees inflation at 79.6%.

Author: Angela Bouzanis, Senior Economist

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Venezuela Inflation Chart

Venezuela Inflation December 2014

Note: Annual and monthly variation of consumer price index in %.
Source: Venezuela Central Bank (BCV).

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