Venezuelan Central Bank Reports Inflationary Spike
Consumer prices rose faster last month than they have for three years, with the cost of food bearing the brunt of a surge in inflation.
Merida, May 10th 2013 (Venezuelanalysis.com) – Consumer prices rose faster last month than they have for three years, with the cost of food bearing the brunt of a surge in inflation.
According to the Central Bank of Venezuela’s (BCV) the Consumer Price Index (CPI), at 4.3% in April saw the largest increase in consumer prices in a single month since April 2010; the BCV report noted that the CPI rose by just 0.8 in the same month last year. In February, the index recorded a 2.8% increase.
Consumers were also hit by a 21.3% rise in scarcity in April compared to March, as reported by the BCV. The BCV’s scarcity index measures the absence of products available to consumers nationwide. Last month, the bank recorded the highest level of scarcity since records began in April 2009.
In recent months Venezuelans have faced shortages of a number of basic commodities, including milk and cooking oil. Pre-cooked corn flour, a cheap staple used to make one of the country’s signature dishes, arepas (corn flour cakes), has also been in short supply in some areas.
As shortages continue, the BCV reported the highest price rises affecting food. Outpacing inflation, the cost of food increased by 6.4%. The April inflation rate was 4.3%, bringing the annual rate up to 29.4%. So far, the first three months of 2013 have seen an accumulated inflation rate of 7.9%- double the rate of the same period last year.
Aside from food, the BCV reported the highest price rises in restaurants and hotels, at 4.3%. Trailing closely behind were the costs of transportation, alcohol and tobacco products; all rising by 4.2% last month.
The most stable prices were found in the areas of housing services, communication and education, all seeing price rises below 1%. Likewise, the bank recorded that of the country’s major cities, Barquisimeto saw the lowest price rises at 3.5%, while the highest rates were recorded in Barcelona and Puerto La Cruz, both at 5.6%. The capital, Caracas, saw lower price rises than most other large cities, at 3.9%.
The report comes less than a month after former BCV head Nelson Merentes was appointed as finance minister with a mandate from President Nicolas Maduro to “achieve single digit inflation” by 2016.
On 2 May, Merentes told Venezuelan media that the country will see progress on most economic problems “soon”.
Already though, the impact of inflation on consumer purchasing power may be mitigated by a 20% increase in the minimum wage, which came into effect on 1 May.
Another increase of 10% is slated for September, with a third to come through two months later at between 5-10%, depending on inflation.