OLYMPUS DIGITAL CAMERAAfter a never-before-seen, jaw-dropping, soul-crushing three-month delay, the Venezuelan Central Bank (BCV for its acronym in Spanish) published inflation rates for June, July, and August. But with the jumbled way in which they rolled out these figures, they might as well have saved themselves the trouble.

So far, and according to these numbers, prices have risen by 39% in 2014 alone. In the first eight months of the year, the inflation rate has already exceeded the target set by the government in the Budget for the whole year, which was in the range of 26%-28%. It’s the highest inflation for a January-August period since 1996 (when, following the dismantling of price and exchange controls, inflation reached 103%).

Over the last 12 months, official inflation reached 60%. That’s higher than any country in the world will have in their entire year… several years for some. For some extra details, read this note (in Spanish) in

But that’s not even the most alarming part of the press release. After inconsistencies in their figures, the BCV “adjusted” the press release… downward!

In the first version of the press release, the BCV presented a 12-month inflation rate of 62.2% for June 2014, implying a monthly inflation of 5.5% for that month instead of the 4.4% they were reporting reflected in the same press release and on the statistics published the website of BCV.

This created strong doubts about the credibility of the numbers, because in July 2014, Henrique Capriles and others reported that inflation in June 2014 was … 5.5%!

The press release was subsequently adjusted, and it now reflects an annual inflation rate of 60.5% for June 2014, which matches to the monthly rate of 4.4% reported for June 2014. Kudos to our friend and frequent commenter @econ_vzla for being the first to notice.

For more details about this “adjustment”, read this other note (in Spanish) in

Ultimately, the BCV has shot itself in the foot multiple times. After concealing the numbers for months and months, they are trying to convince the public that inflation is actually decelerating, and they are doing so by badly fudging their own figures.

One of the other indicators that is not being presented is the “scarcity index,” which roughly measures the percentage of goods that are missing from the shelves. It makes sense for them to hide the numbers, given how the unofficial figures suggest scarcity reached a record-setting 35%.

And you know what’s really scarce? Credible economic figures.

15 thoughts on “Inflation-gate

  1. Inflation-index all monetary items on a daily basis in terms of the Venezuelan Daily CPI and only the effect of hyperinflation is eliminated. This does nothing to actual hyperinflation. As long as the BCV increases the money supply at an excessive rate, there will be hyperinflation. Daily inflation-indexing removes only the effect. It would be as if there is no hyperinflation.


      • 1. The USD 3 Trillion global government inflation-indexed bond market in which this value is inflation-indexed daily in many different countries is solid proof that it is not “nonsense”.

        2. The Chilean banks daily inflation-indexing more than 25% of Chile´s money supply on a daily basis is solid proof that it is not “nonsense”.

        3. The entire Colombian mortgage market being inflation-indexed daily is solid proof it is not “nonsense”.

        4. Brazil having used a daily index in 1994 in their Real Plan to end hyperinflation overnight is solid proof that it is not “nonsense”.


      • Just wait Rafa, next he’ll tell us that all it will take is for the Accountants Guild to petition Mauro to use Daily Indexing and we’ll be all set.

        Mr. Smith: I’m not an economist. I will give you the benefit of the doubt as to your championing of Daily Indexing. Sounds awesome. Your continuous repetition of the mantra gets old. Please understand that Venezuela is in, at the very least, an economic dictatorship, and no amount of repetition of your DI will change things. Nor will “petitioning Maduro” get anyhwere.


  2. First off take it from someone who lives here & tracks prices – THE NUMBERS ARE PURE FANTASY.!!

    Anyone who has had to shop in Venezuela in the last 3 months knows the extent of the lies.

    Here are just a few numbers that I track out of a total of 64 items & services.
    These increases reflect from Jan. 1 until Aug. 31 and are for here in Margarita.

    36 returnable Polar Light beer – Jan, Bs.180 now Bs.330 increase 83.3%
    Ron Cacique 0.75 L – was Bs.120 – now Bs.270 Increase 125%
    OJ Naranjada 1.8 L – was Bs.28 – now Bs.47.76 increase 70.6%
    Coffee 500 grams – was Bs.37.50 – now Bs.67 increase 78.7%
    Coca Cola 2 L – was Bs.28 – now Bs.50.45 increase 80.2%
    Bananas per Kg – was Bs.17 – now Bs.49.20 increase 189.4%
    Melon per Kg. – was Bs.35 – now Bs.67.60 increase 93.1%
    Bread – whole wheat 500 grams – was Bs.47 – now Bs.85 increase 80.9%
    Beef 1st quality per Kg. – was Bs.150 – now Bs.289.90 – increase 93.3%
    Por chops per Kg. – was Bs.120 – now Bs.250 increase 108.3%
    Tomatoes per Kg. – was Bs.55 – now Bs.186.20 increase 238.5%
    Potatoes per Kg. – was Bs.45 – now Bs.87 increase 93.3%

    These are just a few normal items that I chose from my list.
    Remember that’s this is from January, 2014 so it represents only 8 months.

    It’s also impossible to set current prices on items that are no longer sold here like real orange juice, Lipton tea, Kellog’s Corn Flakes, shampoo, deodorant, razors, shaving cream, etc., etc.

    The government thinks that by lying the inevitable wage increases can be reduced.
    They are probably right.
    Given my experience with the average Venezuelan & mathematics they could tell them anything & be believed. The guy in the street is generally lost when you start talking percentages.


    • Mariadela Linares resigned, and amongst her list of grievances was that Margarita fisherman are selling their catch off-shore where they can get dollars. Is that true?


      • Oh boy…

        Not much time will pass before that export is also labelled “extraction smuggling”.

        This economic war really is the war on exports. Let´s not allow any Venezuelan merchandise to be sold abroad, or be purchased by foreigners.


  3. Good that there’s some talk on the subject. First off:

    3,9% on August. Are you fucking serious? Christ, those numbers are worse lies than those told by the INE, and that’s something.


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