The report, published this Wednesday the 8th by the Venezuelan Finance Observatory, points out that the government “seems overwhelmed” in managing inflation. By items, the rise in prices was more noticeable last month in service rates with 156.3%
The Venezuelan Finance Observatory presented the inflationary balance at the end of February 2023 and concludes that “the fiscal and monetary authorities seem overwhelmed and without instruments to stop” the price escalation. They emphasize that “since March 2022, public sector salaries have not increased, but rather some bonuses have been assigned on time.”
Thus, the inflation report published this March 8 by the OVF, indicates that in February it closed at 20.2%. Accumulated inflation is 67.7% and annualized inflation reaches 537.7%.
“With an increase in the price of the dollar in February of 11%, it is evident that a monthly inflation rate of 20.2% suggests that prices are overreacting to the devaluation of the bolivar,” they indicate.
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As a result of these levels of inflation, there is a “loss of competitiveness of products made in Venezuela as they are significantly more expensive than imported goods.”
OVF recalls that February was the month when the Central Bank of Venezuela “intervened with a greater amount of reserves because the issuing institution lost US$ 420 million, the highest monthly figure since the new exchange system began in 2019.”
At the detail level, the items that experienced the greatest increases were Services with 156.3%, Health 15.8%, Clothing and Footwear 13.5% and Home Equipment 15.1%. Food registered an increase of 12.0% and Transportation 12.2%. This increase in services is part of the policy that the government has followed to virtually eliminate subsidies for electricity, water, urban cleaning, and telecommunications.
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