Inflation and Shortages Remain High in Venezuela
Inflation and shortages remained high in January according to a report by the Venezuelan Central Bank (BCV), however levels of food shortages have decreased.
Mérida, 14th February 2014 (Venezuelanalysis.com) – Inflation and shortages remained high in January according to a report by the Venezuelan Central Bank (BCV), however levels of food shortages have decreased.
The monthly inflation rate for January was 3.3%, compared with 2.2% in December, 4.8% in November, and 5.1% in October. Annual inflation remains almost unchanged, slightly rising to 56.3%, a Bolivarian-era high.
The BCV’s report, released Tuesday, emphasised that in January prices in nine of thirteen product groups measured rose more slowly than the 3.3% rate. However prices of restaurants and hotels, food and drinks, and alcoholic drinks and tobacco all rose at higher rates of between 4-5%.
Meanwhile, the overall level of shortages in the economy shot up from 22.2% in December to 28% in January. The BCV’s scarcity index measures the rate at which surveyed retailers aren’t stocking specific items in the economy.
Nevertheless, the level of food shortages decreased from 28.3% in December to 26.2% in January. “In shortage levels for the month on January, the lesser availability of items such as vehicles, motorcycles and other items not associated with the basic needs of the Venezuelan population proved determining,” the report explained of the overall increase in shortage levels.
The Venezuelan government has been battling with shortages, inflation and currency speculation over the previous year, which it argues is due to an “economic war” being waged by business sectors aligned with the conservative opposition.
Critics and opponents of the President Nicolas Maduro’s administration claim government policies such as currency controls and price caps are responsible for the situation.
Recently the government reformed currency controls and introduced a new law limiting prices and profit margins in an attempt to “order” the national economy and reduce shortages and inflation.
In relation to this, the BCV cited the government’s hope that “before the end of the first quarter of 2014 the measures taken will impact positively on shortages and the stability of prices”.
