MercoPress. South Atlantic News Agency

Venezuela's inflation slowing down but still very high

The OVF data differs from the one released earlier this month by the Central Bank of Venezuela

Inflation in Venezuela for October of 2021 was 8.1%, for a YoY record of 1,258%, according to a report from the Venezuelan Observatory of Finance (OVF) released Monday.

After Monday's data, inflation for the first ten months of 2021 reached 576.3%, as per the body linked to the National Assembly elected in 2015.

“This slowdown in inflation occurs due to the stability that the price of the dollar has maintained, due to the recurrent interventions that the Central Bank of Venezuela has carried out, burning international reserves to keep the exchange rate without significant fluctuations,” the Observatory said.

The price of the food basket has reached its historical maximum of US $ 343.75 for a family of 5, with a variation of 12.77% compared to September's US $ 304.83.

The items with the greatest variation in prices during October was entertainment (19.2%), followed by education (11.8%) due to the return to face-to-face schooling; transport (11.3%) and alcoholic beverages (10.5%).

“There was evidence of an increase in dollars in products and services, as an effect of the past monetary reconversion,” the report said.

The OVF also stressed that “such figures are estimated at the time that the government has declared its flexibility from November 1 to January 1, 2022, a return to face-to-face classes with few conditions and attendance, and in the face of the elections for governors, state legislators, mayors and councilors on November 21, 2021.”

The OVF data differs from the one released earlier this month by the Central Bank of Venezuela, which placed October's inflation at 6.8%, for an accumulated 574.4% in 2021, and 1,575.3% yoy.

October's was the lowest monthly inflation since April 2015.

According to the Central Bank, communications went up 23.4%, education 14.5%, leisure and cultural services 12% and housing 10.8%.

Venezuela's perennial hyperinflation has caused a sharp drop in the economy with a huge impact on demand, in addition to jobs and wages.

According to International Monetary Fund (IMF) projections, inflation will reach 2,700% by the end of 2021.