Caracas, May 20 (Special for OrinocoTribune.com)—This Wednesday, May 19, the Central Bank of Venezuela (BCV) released the consumer price index (CPI) for April 2021, a statistic through which inflation levels in the country can be measured.
According to Venezuela’s monetary authority, the index suffered a variation of 24.6%, which brings the total to 183.8% for the first four months of 2021, with 46.6% in January, 33.8% in February, 16.1% in March and 24.6% in April.
A comparison between April 2020 and April 2021 shows a small decrease in the inflation figures. In April 2020 an inflation rate of 27.5% was recorded.
The BCV details that the general CPI for the Metropolitan Area of Caracas, corresponding to the aforementioned period, stood at 23.1%, 7.6 points more than that registered in March, which stood at 15.5%.
The items that showed the greatest increase in April were:
• Communications: 75.1%;
• Housing services except telephone: 44.3%;
• Home equipment: 38.1%;
• Clothing and footwear: 37.7%;
• Transportation: 32.6%;
• Recreation and culture: 30.1%;
• Education services: 29.4%.
Venezuelan conservative economist Asdrúbal Olivero posted on his Instagram account a video in which he indicated that, according to his data, the GDP this year is expected to drop around 4%, with a recovery of 2% in the oil sector and a 4.4% drop in the non-oil sector. The director of Ecoanalítica also said that the inflation rate this year will be around 1,500%, more or less half of the inflation of 2020.
While the inflation is always considered a very important indicator of an economy’s health, in Venezuela the number has been reduced due to the recent de facto dollarization of the economy, in which a significant portion of transactions are being processed in US dollars or other foreign currencies. A recent survey released by the Venezuelan media outlet Ultimas Noticias showed that about one third of financial transactions in Venezuela are made in US dollars, either in cash or using electronic payment platforms.
A majority of Venezuelans still pay and receive their income in bolivars, and thus are affected by this phenomena that is directly connected with variations of the foreign exchange rate, currently around three million bolivars for one dollar.
Venezuela has been terribly affected by US and European “sanctions” and economic blockade since 2015, but in an even more acute fashion since former President Trump took office in 2017. These “sanctions” have targeted Venezuela’s oil production and exports through the state-owned oil company PDVSA, and led to the seizure of CITGO in the US and Monómeros in Colombia.
Featured image: Inflation in Venezuela remains very high but is following a downward trend. File photo courtesy of EFE.
Special for Orinoco Tribune by Jesús Rodríguez-Espinoza