Venezuela Inflation


Venezuela: Long-delayed data show inflation soaring to above 60%

September 9, 2014

Consumer prices in August jumped 3.93% over the previous month, which was below the 4.14% rise tallied in July and virtually in line with the 3.90% increase that LatinFocus Consensus Forecast panelists had expected. August’s increase mainly reflected higher prices for utilities as well as for food and non-alcoholic drinks. Annual inflation rose from July’s 62.0% to 63.4% in August, which marks the highest inflation rate since 1997. While the Central Bank published inflation data for the first time since June, it failed to deliver data for core inflation or for the scarcity index.

Since November of last year, 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, including statistics for inflation, the scarcity index, estimates for GDP, balance of payments and external debt. In addition, some relevant fiscal data (such as consolidated public sector figures) have been omitted since 2011. 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 2014 budget, the Venezuelan government expects inflation to end the year at between 26.0% and 28.0%. LatinFocus Consensus Forecast panelists, however, expect inflation to reach 66.3% by the end of this year, which is up 0.5 percentage points from last month’s forecast. In 2015, the panel sees inflation at 56.4%.

Author: Ricard Torné, Lead Economist

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Venezuela Inflation Chart

Venezuela Inflation August 2014

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

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