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Sunday, March 26, 2023

Inflation in Venezuela slowed down 20 points in February

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The inflation February in Venezuela was 20.2%, 19.2 percentage points less than in January, when it was 39.4%, according to data released this Wednesday by the Venezuelan Finance Observatory (OVF), independent entity outside the Central Bank.

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In addition, the OVF indicated, in a press release, that the accumulated inflation in 2023 was 67.7% and the annualized inflation was 537.7%.

“In this way, an inflationary situation is configured where the fiscal and monetary authorities seem overwhelmed and without instruments to stop them. This has occurred in an environment where, since March 2022, public sector salaries have not increased, but rather have been assigned punctually some bonuses”indicated.

The organization explained that, with an increase in the price of the US dollar of 11% in February, it is “evident” that a monthly inflation rate of 20.2% suggests that prices are “overreacting to the devaluation of the bolivar”.

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“This translates into a loss of competitiveness of products made in Venezuela as they are significantly more expensive than imported goods”he added.

The OVF said that, in February, the Central Bank of Venezuela intervened with the largest amount of reserves, “because the issuing institute lost 420 million dollars, the highest monthly figure since the new exchange system began in 2019.”

The sectors that increased the most in February were services with a rise of 156.3%; household equipment, with a rise of 15.1%; clothing and footwear, with an increase of 13.5%; transport with 12.2% and food with 12%.

Venezuela emerged in December 2021 from a hyperinflation that it entered in 2017 and that, for four years, reduced the value of the bolivar, the official currency, as well as the confidence of citizens in it, which is why they unofficially adopted the dollar in an attempt to protect their income.

Source: Ambito

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