According to estimates from the Venezuelan Finance Observatory, the items that showed the greatest increases in prices were Communications with 258.8%, Clothing and footwear with 48.3% and Food with 35.5%. They point out that the significant rise in parallel and official exchange rates since September 2022 once again boosted inflation
The inflation rate in the first month of 2023 closed at 39.4% while the annualized rate from January 2022 to January 2023 was 440%, according to calculations by the Venezuelan Finance Observatory (OVF).
These figures suggest that the Venezuelan economy entered a phase of sharp acceleration of inflation, as an expression of the macroeconomic instability that has been observed, especially since the government was unable to continue maintaining the stability of the exchange rate that existed until August 2022. As a consequence of the higher levels of inflation, public sector wages have pulverized », indicated the OVF in a report.
He pointed out that the exchange rate, both parallel and official, have denoted a significant upward trend that is fed back with expectations of devaluation and inflation that are generated in the absence of an economic program that promotes stability and growth.
“Thus, the economy is unanchored and without a clear reference to guide the formation of prices in the face of the abandonment of the exchange rate anchor, due to the loss of international reserves that the BCV registered during 2020, 2021 and 2021. Therefore, Venezuela faces an obvious danger of re-entering another episode of hyperinflation.”
In greater detail of the price estimation by the OVF, The items that denoted the greatest increases were Communications with 258.8%, Clothing and footwear with 48.3% Food with 35.5%, Transportation with 26.6% and Housing rental 25%, among the components with the highest weighting in the price index.
“It should be mentioned that the rise in food prices is the one that hits households the most by virtue of its impact on consumer spending,” said the OVF.
By the way, the Central Bank of Venezuela has not yet updated the results of the National Consumer Price Index (INPC) since October 2022, when it reported a monthly variation of 6.2% and a cumulative figure between January 2022 and October 2022 of 119 ,4%. This debt of the official data by the issuing entity persists despite the fact that in recent days, the vice president Delcy Rodríguez publicly announced that the country’s inflation in 2022 ended at 234%.
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