Venezuela skyline with mountains

Venezuela Inflation May 2020

Venezuela: Inflation falls to over two-year low in May but remains sky-high and is expected to spike on Covid-19 fallout

National consumer prices rose 38.6% form the previous month in May, up from April’s 27.5% month-on-month increase and marking the highest print in four months, according to data released by the Central Bank of Venezuela (BCV) on 8 June. The acceleration largely reflected faster rising prices for household equipment, food and housing services. On the other hand, prices for apparel and transport grew at a softer pace than in the previous month.

Meanwhile, inflation receded to 2,297% in May (April: 2,312%), marking the lowest print since March 2018. The removal of price controls last year enabled the private sector to play a greater role in the import and sale of consumer goods, thus reducing price pressures. This, coupled with a rapid dollarization of the economy, have helped quell price pressures somewhat. Meanwhile, annual average inflation stood at 3,231%, down from 3,759% in April.

Going forward, inflation is expected to accelerate, however. Inflationary pressures stemming for an acute gasoline shortage are set to spillover into others sectors of the economy, while the sharp depreciation of the bolivar will result in a stronger pass-through effect. To tame the bout in inflation, on 24 April the government reintroduced price controls on 27 food products, and hiked the minimum wage as well as pensions and food bonuses. The move is likely to aggravate shortages and spawn parallel markets, however.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest