Inflation accelerates in Venezuela alert independent entity

Inflation in January in Venezuela was 39.4%, while the annualized rate was 440%, according to the Venezuelan Finance Observatory (OVF), an independent entity that contributes to the production of statistics amid the opacity of data in the country.

The OVF warns that the figures show the beginning of a phase of “strong acceleration” of inflation, a consequence of the macroeconomic instability in the country.

José Guerra, an economist, former research manager of the Central Bank of Venezuela (BCV) and member of the OVF, affirms that the situation translates into the “ruin” of Venezuelan workers.

“Private salaries have increased slightly, but public salaries have a significant delay of practically 10 months, with which public employees and Social Security employees, more than 5 million workers between active and retired, are the main victims of this process of high inflation in Venezuela,” Guerra said this week.

He added that “this places Venezuela in the real danger of a process of new hyperinflation in a context in which the exchange rate is devalued every day by action of the Central Bank, the economy is out of control.”

At the beginning of last year, Venezuela emerged from the hyperinflation in which it had been immersed since 2017, however, its inflation rates continue to be among the highest in the world.

Although he did not specify how, in mid-December of last year President Nicolás Maduro ordered his economic team to implement measures to defend the official dollar rate which, like the unofficial dollar rate, began to rise rapidly.

According to the OVF, the items where the highest inflation was registered last month were communication services, recreation, clothing and footwear, as well as food and non-alcoholic beverages.

The economist Ángel Alvarado, also a member of the OVF, explained that the economy could be in the process of stagnation.

“Prices continue to rise worryingly, seriously affecting the pockets of Venezuelans and especially affecting public administration workers, who maintain salaries in bolivars,” he explained.

Since the beginning of this year, various unions in the public sector have carried out protests to demand a salary increase that allows them to cover their basic needs.

Currently the minimum wage in Venezuela is the equivalent in bolivars to about 6 dollars, but to cover only the food basket for a family group of 5 people in December, at least 377 dollars were required, according to the Center for Documentation and Analysis for Workers ( CENDA).

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