Venezuela: Inflation surges in Q4
January 15, 2018
The available evidence continues to show that price pressures are exploding in crisis-hit Venezuela. Although no official inflation data has been released in nearly two years, indicators from official and non-official sources suggest that inflation has risen astronomically since December 2015—the last month for which official data was available—when it hit 180.9%. FocusEconomics Consensus Forecast panelists estimate that inflation came in at 1,814% at the end of Q4 2017, significantly above Q3’s estimate of 989%. The figure would mark a record high if confirmed. The collapse of the country’s exchange rate on the black market, sharp increases in the money supply and shortages of basic goods are keeping price pressures extremely elevated.
In a sign of the spiraling inflation crisis, the latest Central Bank data revealed that the money supply (M2) soared by an exorbitant 873% annually in November (the latest month for which data is available), surpassing October’s 645% increase. Similarly, recent data released by the opposition-led National Assembly pointed to soaring price pressures in the country. The legislative body stated that inflation ended 2017 at a staggering 2,616%. According to the National Assembly’s inflation data, consumer prices rose 85% month-on-month in December.
Venezuela Inflation Forecast
Panelists participating in the LatinFocus Consensus Forecast project inflation ending 2018 at 2,687% and 2019 at 1,596%.