Inflation in Venezuela dropped to 68% year-on-year in June 2024, according to the independent Venezuelan Finance Observatory (OFV).
June’s inflation rate of 68% is down from 78% in May and 87% in April, marking the lowest rate since 2017.
The OFV expects annual inflation to range between 60% and 65% this year, a significant improvement from the 120% forecast in January and the 193% rate in 2023.
The monthly inflation rate in June was 2.4%, lower than May’s 3.9% and April’s 2.9%. Cumulative inflation from January to June reached 18.1%.
The decline in inflation is attributed to the bolivar’s nominal appreciation against the dollar.
The OFV noted that “in June, the exchange rate decreased by 0.25%,” and the government’s wage containment measures also played a role.
Cost of Essential Goods in Week 26 of 2024
- Eggs: Bs 180
- Corn flour: Bs 48
- White cheese: Bs 190
- Meat: Bs 320
- Coffee: Bs 480
- Rice: Bs 65
- Oil: Bs 175
- Sugar: Bs 65
The total cost of these items was Bs 1,523, a 48.30% increase, equivalent to US$37.89, an 8.59% increase.
Services contributed 8% to inflation, communications 4.9%, household equipment 3.7%, and education 3%.
Urban sanitation rose by 7.9%, cable TV by 7.1%, mobile phone services by 6.3%, and fixed phone services by 7.3%.
The Capital District had the lowest monthly inflation rate at 1.6%, followed by Anzoátegui at 4.8%, Nueva Esparta at 2.2%, and Zulia at 2.7%.
Venezuela’s Inflation Falls to 68% in June
The annualized inflation rate of 68% surpassed the 30% depreciation of the exchange rate in June.
The OFV explained that domestic inflation is 2.7 times higher than the exchange rate depreciation, reducing internal but increasing external bolivar purchasing power.
This suggests a progressive and noticeable delay in the real exchange rate, affecting local production.”
Venezuela’s improving inflation rates matter because they indicate economic stabilization and potential recovery prospects.
Lower inflation helps restore purchasing power and confidence among consumers, potentially leading to increased economic activity and improved living conditions.
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