BackVenezuelan inflation soars toward 30% as shortages mount
The annual inflation rate climbed to 29.4%, up from 25.1% the month before and the highest since August 2010
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Caracas: Venezuelan consumer prices soared the most in three years last month as President Nicolas Maduro’s government reduced dollar sales to importers and the central bank’s scarcity index reached the highest on record.
Prices rose 4.3% from March, the central bank said on Friday, the most since April 2010 and faster than the 3% median estimate of nine economists in a Bloomberg survey. The annual inflation rate climbed to 29.4%, up from 25.1% the month before and the highest since August 2010.
This has been caused by the government’s paralysis in distributing foreign currency, Francisco Rodriguez, senior Andean economist at Bank of America Corp., said by phone from New York. Inflation and scarcity will continue worsening.
Venezuela’s government has only held one auction of foreign currency since introducing a new exchange system 27 March, one month after it devalued the currency 32%. Fewer dollars for importers exacerbate shortages and push up the cost of goods that are available. Finance minister Nelson Merentes said 2 May that 85% of the country’s economic problems would be solved soon.
The bolivar has declined about 33% on the black market this year, according to Dolar Today, a website that tracks the exchange rate on the Venezuelan border with Colombia. The currency currently trades at about 26 per dollar on the black market, compared with 6.3 on the Cadivi system reserved for importers of essential items, such as medicine.
The scarcity index, which measures the amount of goods that are out of stock on the market, rose to 21.3% last month, the highest since the central bank started tracking the measure in April 2009, according to the central bank report. Food prices climbed 6.4% in April, the bank said.
Shortages of basic goods risk worsening social tensions in Venezuela, said Rodriguez. The government alleges nine people died in the post-election violence on 15-16 April. BLOOMBERG
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