Venezuela’s economy is still facing a challenging economic outlook, according to a recent report published by the Venezuelan Observatory of Finance (OVF), as the monthly inflation rate stands at 8.5%.
OVF’s data revealed a greater increase in inflation in the period studied compared to May, which was 7.6%. As a result, year-on-year inflation reached 429% and cumulative inflation reached 100.8%.
On the other hand, the report highlights that the exchange rate between the bolivar and the US dollar has experienced a significant growth of 6.5% while the monetary base has reached 12.4% growth.
“Economic agents have shown a tendency to destroy the national currency due to the experience of past inflation and expectations of a future devaluation of the bolivar,” the OVF clarified.
The monetary expansion led by the Central Bank of Venezuela (BCV) left pressure on the exchange rate and prices. The OVF report also highlights the impact this situation has on public sector wages and pensions. The data suggests
Controlling the exchange rate and stabilizing prices have not managed to curb the inflationary process, which generates concern in the population and makes it difficult to maintain the purchasing power of citizens.
As a result, Venezuelans can currently only cover 10.7% of the basic food basket amid the inflationary rise motivated by the loss of purchasing power due to the persistent devaluation of the currency in the midst of an increasingly dollarized economy.
The OVF report highlights the great importance of addressing this situation and taking effective measures that can reduce the negative impact of inflation on the country’s economy and the well-being of its inhabitants.
