Official inflation in Venezuela fell to 1.4% in March, but independent meters say it was almost ten times as much

The Central Bank of Venezuela (BCV) reported Wednesday that the Caribbean country recorded inflation of 1.4% in March, the lowest figure since August 2012, when the average price increase was 1.1%, and the seventh consecutive month with single-digit monthly inflation.

The issuing body indicated that cumulative inflation in the first quarter of this year reached 11.4%, while year-on-year inflation (March 2021-March 2022) was 284.4%.

Central Bank statistics show that the sectors that grew the most last month were education, which varied by 12.2%; communications, which had an increase of 11.1%; and household equipment, which rose by 2.9%.

On the other hand, alcoholic beverages and tobacco show a decrease of 1.3 per cent.

While the BCV argues that the National Consumer Price Index (INPC) continued in March “its slowdown trend”, other measurements made by independent entities show, on the contrary, an acceleration in inflation.

According to the Venezuelan Finance Observatory (OVF), last month the nation recorded inflation of 10.5%, an increase of 8.8 points since the price increase in February was 1.7%.

In this regard, the economist and former deputy José Guerra, a member of the OVF, said on Wednesday that the BCV “has no credibility.”

“The March 2022 inflation figure of 1.4% is absurd. The Finance Observatory keeps records of each price of each product in the price index. Don't believe that figure of an institution that has hidden the data and publishes what suits it,” Guerra wrote on his Twitter account.

The OVF notes as the main reason for the price acceleration in March the announcement and subsequent application of a new Tax on Large Financial Transactions (IGTF), which levies 3% on currency transactions in cash and which “created an effect of increasing expectations on the price level”.

Venezuela, which had a price increase of 130.060% in 2018, officially exited hyperinflation last December, registering 12 months with a rate below 50%.

(With information from EFE)

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