Venezuelan inflation stood at 6 % in November

The OVF reported that Venezuelan inflation in the month of November increased by 6 %, while the accumulated so far this year is 619.9 %

The Venezuelan Finance Observatory announced that Venezuelan inflation in November stood at 6.0 %, registering a small decrease when compared to October, which was 8.1 %.

The accumulated and annualized inflation of the inflation rate was located at 619.9 % ​​and 769.0 % respectively. The behavior of prices in November was impacted by the stability of the exchange rate.  Among the areas that registered the greatest increase are: Health with 18.6 %, Goods and various services with 16.5 %, Food 11.5 % and Footwear 9.8 %.

Factors that affect inflation

The decrease in the inflation rate is the consequence of some factors that intervene in the financial market, such as the stability of the exchange rate, which was observed in the month of November, but which meant a fall in the International Reserves equivalent to 171 million dollars, as a consequence of the intervention of the Central Bank of Venezuela (BCV) in the exchange market every time it offers dollars in cash.

Another factor that favored the decrease in the inflation rate is related to the decrease in government spending, increasing the monetary base by 5.0 % in the month.

When we make a comparison of the 769 % annualized inflation for November 2021“with the annualized rate of variation of the exchange rate at 340 %, it is noticeable that the rise in prices far exceeds the depreciation of the bolivar.” This shows “that the prices of manufactured goods in Venezuela are becoming relatively expensive in relation to imported goods”, revealing the lag of the manufacturing and agri-food industry sectors with respect to commercial activities.

M. Rodríguez

Source: bancaynegocios

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