Inflation in Venezuela could top 1 million percent by year’s end as the country’s historic crisis deepens, the International Monetary Fund said on Monday.
Venezuela’s economic turmoil compares to Germany’s after the first world war and Zimbabwe’s at the beginning of the last decade, said Alejandro Werner, head of the IMF’s western hemisphere department.
“The collapse in economic activity, hyperinflation, and increasing deterioration … will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blogpost.
The Central Bank's Monetary Policy Report has shown that inflation has slowed considerably.
Headline inflation was 0.9 percent in February, while core inflation measured 0.5 percent.
The following is the Central Bank's report issued today:
"Since the last meeting of the Monetary Policy Committee (MPC) in November 2017, global growth prospects have continued to strengthen.
The Central Bank's Monetary Report is showing an increase in the unemployment rate but a containment of the rate of inflation.
The report was released today.
"Since the last Monetary Policy Announcement in September 2016, oil prices rallied to a 15-month high of near US$50 dollars per barrel (WTI) in October, but have declined since.
Though oil prices generally remained low, they improved in the third quarter of 2016 and averaged US$44.9 compared to US$39.4 in the first half of the year.
The Central Bank is saying that despite the VAT reduction to 12.5 percent, food prices have been increasing.
As a result food inflation for February 2016 was 9.4 percent, an increase from the 4.5 percent recorded back in February 2015.
Headline inflation for February increased to 3.4 percent compared to the 2.4 percent recorded in January.
In its latest monetary policy announcement, the Central Bank says the energy sector contracted by 5 percent in the last quarter of 2015 and for the start of 2016 sales for new cars and cement have taken a hit.