Venezuela’s inflation rate slows to 189 percent

Caracas (AFP): Venezuela, which often experiences record inflation, closed 2023 with an increase in bolivar prices of 189.8 percent, a slowdown compared to the previous year’s 234 percent, according to the Central Bank on Friday.

Venezuela, whose economy is almost completely dollarized after years of recession and hyperinflation — which hit 686 percent in 2021 — is struggling with one of the worst inflation crises in the world.

Shaken by a serious economic meltdown, the country saw its GDP contract by 80 percent between 2013 and 2021.

That figure from the Central Bank is similar to estimates from private organizations, such as the Venezuelan Financial Observatory (OVF) which predicted inflation of 193 percent in its bolivar currency.

The OVF attributed the slowdown to a lesser depreciation of the bolivar and a policy of “salary reduction,” since salaries have not increased since May 2022.

The Venezuelan government had also tried the bet on cryptocurrencies in 2018, in part due to inflation but also because of the US embargo on oil. But the “Petro”, the state cryptocurrency, will disappear on January 15 following a perceived failure of the currency and a corruption scandal.

The only consolation for Venezuela today is that it has ceded the title of worst inflation in 2023 to Argentina, which closed with an increase in peso prices of 211 percent, after the slow fall of its own currency and a move by the new president, Javier Milei, to devalue it by another 50 percent after taking office in December.