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Venezuela Inflation January 2018

Venezuela: Inflationary spiral continues at start of 2018

The available evidence continues to point to hyperinflation taking place in crisis-hit Venezuela. Although no official inflation data has been released in 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%. The opposition-led National Assembly stated that consumer prices rose a staggering 84.2% over the previous month in January, broadly unchanged from December’s increase. According to the Assembly, annualized inflation came in at an astounding 4,068% in January.

In a sign of the spiraling inflation crisis, the latest Central Bank data revealed that the money supply (M2) soared by an exorbitant 1,121% annually in December (the latest month for which data is available), surpassing November’s 874% increase. In addition, the government raised the minimum wage in January, likely in response to spiraling price pressures. Moreover, the Central Bank’s decision to unify the two-tiered exchange rate system and devalue the DICOM exchange rate in February will likely keep price pressures elevated in the coming months.

Venezuela Inflation Forecast

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