Venezuela Inflation Q3 2016


Venezuela: Inflation soars in Q3

October 7, 2016

Given the dearth of official data for inflation, different indicators from official and non-official sources are used as proxies to measure the evolution of price levels in the South American country. According to figures from the Venezuelan Center of Documentation and Analysis for Workers (Centro de Documentación y Análisis para los Trabajadores, CENDA), the basic basket of food, goods and services was 13.6% more expensive in August compared to July and 552% higher than in the same month in 2015. The basic basket of food, goods and services takes into consideration prices of a different set of products than the consumer price index; particularly, the basic basket tracks prices of selected products to cover basic food needs, personal hygiene, living expenses, healthcare, education, clothing and footwear.

FocusEconomics Consensus Forecast panelists estimate that inflation jumped from 368.2% at the end of Q2 to 454.5% at the end of Q3. The latest available data show that the money supply increased by 104.6% in August, marginally up from July’s 99.4% increase. The money supply is expected to keep increasing at an alarmingly fast rate following new reports that show that oil output is declining.

Inflation is seen ending 2016 at 559.7%. For 2017, the panel expects inflation of 542.1%.

Author: Jean-Philippe Pourcelot, Economist

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