2023 closed with an inflation rate in Venezuela of 192 percent, very far from the 305 percent of 2022. This slowdown was due to two main factors: the lower depreciation of the bolivar and the base of comparison.
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The Venezuelan Observatory of Finance (OVF) explained that the Central Bank of Venezuela (BCV) intervened more actively in the exchange market in 2023 to stop the depreciation of the bolivar. As a resultthe price of the dollar increased 106 percent in 2023, compared to 281 percent in 2022.
The independent body put the inflation rate in December 2023 at 3.9 percent, up from 1.9 percent in November, but well below the 37.2 percent in December 2022. “This means that, although “The pace of price increases accelerated in December 2023, the result in annualized terms was a lower inflation rate,” the OVF indicated in a press release.
“It is an important reduction, from 305% in 2022, the 200 percent barrier was brokenor, but there is still a long way to go to get to lower inflation,” explained economist Ángel Alvarado, a member of the observatory.
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The inflation rate in December 2023 stood at 3.9%, up from 1.9% in November, but well below the 37.2% in December 2022. This means that, although the rate of increase in Prices accelerated in December 2023, the result in annualized terms…
— Venezuelan Finance Observatory 🇻🇪 (@observafinanzas) January 8, 2024
It is an important reduction, from 305 in 2022, the 200 percent barrier was broken, but there is still a long way to go to get to lower inflation.
However, Alvarado noted that the measures adopted by the Venezuelan Government “have a negative side” and that is the growth of life in dollars “and the loss of competitiveness of the Venezuelan economy.”
The slowdown in inflation was also due to the policy of reducing workers' real wages. Real wages for public employees have fallen dramatically in recent years, reducing consumers' purchasing power.
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The items that registered the largest price increases in December 2023 were services, clothing and footwear, home and health equipment. These increases were due to a combination of factors, including the lower depreciation of the bolivar, the comparison base, and the policy of reducing real wages.
ANA MARÍA RODRÍGUEZ BRAZÓN
TIME CORRESPONDENT
CARACAS
#inflation #reduced #Venezuela #high
