Before the end of 2021, economic relief was felt in Venezuela. The first months of the year also showed signs of the beginning of a small but palpable improvement. February registered an inflation of 1.7 percent but March left a tasteless as this indicator stood at 10.5 percent.
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These figures were provided by the Venezuelan Finance Observatory (OVF), an independent body. Annualized inflation stood at 251 percentwhile the accumulated was 17.8 percent
The OVF indicates that among the items that registered the greatest increases are the lines Household Equipment (105.9 percent), Services (15.9 percent), Communications (8.7 percent) and Food (3.1 percent). ).
Why did inflation increase?
According to the OVF, made up of economists and university professors, the acceleration of inflation occurred in a context in which the exchange rate appreciated, that is, while in February the exchange rate of the bolivar against the dollar was Bs/US $4.63, in March it reached Bs/US$4.50, denoting a fall of 2.8%.
Which means that the anchoring of the exchange rate is insufficient to permanently reduce inflation.
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In addition, there were recently two economic announcements that have influenced this rise, and they have been the increase in the minimum wage and the setting of the tax on Large Financial Transactions (IGTF), the latter “obviously created an effect of growing expectations on the level of prices·, says the OVF statement.
The document also indicates that the increase in inflation was “expected” “even more so when there have been serious problems in the application and implementation of this tax.”
Regarding the minimum wage, it went from 1.6 dollars a month to almost 40 dollars, including the food benefit. Therefore, the recently decreed salary increase “has caused a deterioration by virtue of the aforementioned price increase,” the document details.
Thus, the food basket jumped from US$353 in February to US$370 in March, almost ten times the minimum wage.
ANA RODRIGUEZ BRAZON
WEATHER CORRESPONDENT
CARACAS
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