Venezuela Reports Lowest Monthly Inflation in 12 Years

Caracas (OrinocoTribune.com)—On Friday, February 10, the Central Bank of Venezuela (BCV) published the inflation data for January 2024. According to the data, the consumer price index rose at a 1.7% rate, representing a decrease of 0.7 points compared to December 2023, when it stood at 2.4%. Compared to the 42.1% inflation in January 2023, Venezuela has managed to reduce inflation by 40.4 points despite persistent illegal sanctions and blockades from the United States and Europe.

The BCV also reported that the annual accumulated inflation is about to go below the 100 psychological mark. As of January 2024, the figure stands at 107.4%, 82.4 points lower than the previous month.

Four sectors began 2024 with interannual inflationary variations of less than 100%, led by Home Rentals with 74.40% and Food and Non-Alcoholic Beverages with a 90.50% increase in their price marker compared to January 2023. Alcoholic Beverages and Tobacco, along with Restaurants and Hotels, remained just below three digits at 99.36% and 99.60%, respectively, in the last annual BCV report.

The striking case of Home Rental is explained by the high supply of properties that has forced rental prices to be contained with greater or lesser intensity depending on the location. Communications remained the sector with the highest annual inflation, exceeding, in relative terms, the National Price Index in January and standing at 263%. This sector was the one that reported the highest price increase in the last 12 months.

According to the Central Bank, the inflation figure shows a trend toward slowing inflation, which has continued declining for four consecutive months after reaching a peak of 8.7% in September 2023. Additionally, the reported monthly inflation has been in single-digit figures for the last eight months. This is a remarkable achievement, considering that the country just ended nearly four years of hyperinflation in 2021.

For January 2024, the monthly inflation by sector was reported as follows: Food and Non-Alcoholic Beverages at 1.2%; Dresses and Footwear at 1.2%; Health at 2.6%; Transport at 1.1%; Restaurant and Hotels at 2.0%; Housing Service Except Telephone with 2.5%; Home equipment 2.6%; Leisure and Culture with 2.1%; Miscellaneous Goods and Services with 2.3%; Education Services 3.5%; and communication services registering the highest inflation with a 3.7% increase.

For many economists, recent inflation changes reflect a monetary policy implemented by the Central Bank focused on controlling the foreign exchange rate, thus reducing its impact on price building. To achieve this, the Central Bank has been participating more actively and aggressively in foreign exchange operations, selling US dollars to have access to the bolivars it needs to keep the Venezuelan economy functioning while also serving as a supplier of US dollars, keeping the hikes of the US dollar at bay.

Venezuela’s 2023 Annual Inflation Ends at 189%, Lowest Since 2015 (+Argentina)

International and regional figures
The neoliberal Argentinian far-right government, led by Javier Milei, reported a January inflation of 20.6% after a disastrous 25.5% last December. Thus, Argentina now leads the region in monthly inflation rate and annual accumulated inflation, standing at 254.2%, despite not suffering illegal sanctions or blockades.

Most Latin American countries, except for Colombia, report annual inflation rates below the 5% mark. Colombia reported an accumulated inflation of 8.35%, with a decreasing trend for January. Uruguay reported a January monthly inflation rate of 1.53%, a few months before the end of the neoliberal Luis Lacalle administration, despite an annual rate of 5.11%, indicating a price hike tendency in an electoral year.

Argentina, along with Venezuela, Lebanon, and Türkiye, are grouped as the countries with the highest inflation in the world. The interannual inflation data are the following: Argentina at 254.2%, Lebanon at 124%, Venezuela at 107.4%, and Türkiye at 64.9% as of January 2024.

Special for Orinoco Tribune by staff

OT/JRE/SF