Inflation and Unemployment Down in Venezuela

Inflation dropped to 0.2% in February, the lowest monthly rate in 17 years. Also, unemployment dropped to 15.5% in February, down 3.6% compared to a year earlier.

Caracas, Venezuela, March 1, 2005— Inflation fell from1.9% in January, 2005 to .2% in February, 2005 reaching, according to a report released by the Central Bank of Venezuela (BCV), its lowest level in seventeen years. Unemployment also decreased 3.6% between January, 2004 when 19.1% of population was unemployed and January, 2005, when 15.5% of the population was registered as unemployed.

The deceleration of the inflation index was attributed to a lower price variation of products subject to supply and demand, from 2.7% in January to negative .3% in February, and to a lower price variation of government regulated products, that went from 1.1% in January to .7% in February.  According to the Central Bank, “the contraction of non-controlled prices is due to a fall of 3.5% in food prices.”  In particular, the Central Bank cited a drop in prices of vegetables, red meat, chicken, pork, pasteurized milk, and cheese. 

The Central Bank reported that inflation between February 2004 and February 2005 was 16.9%, significantly lower than the figure registered between February 2003 and February 2004 of 21.9%. 

The Minister of Planning and Development, Jorge Giordani, announced in a TV program that he expects inflation to wind up in single digits by the end of 2005. “We have figures that reveal the existence of a sustained economic growth in Venezuela,” stated Giordani, referring to the 17.3% growth in the gross domestic product in 2004.  Government officials are estimating that the economy will grow by 5% in 2005. 

According to figures released by the Venezuelan National Institute of Statistics, 15.5% of the population, or approximately 1.8 million Venezuelans were registered as unemployed for the month of January, 2005. In comparison with figures for the corresponding month of the previous year, unemployment dropped 3.6%, from 19.1% to 15.5%.  The government predicts that unemployment will further drop over the course of the upcoming year as the economy to continues to grow.