Venezuela says inflation 274 percent last year, economists say far higher

CARACAS (Reuters) - Annual inflation in crisis-hit Venezuela last year reached 274 percent, according to data the central bank provided to the International Monetary Fund, although many economists believe the true figure is far more alarming.

People line up outside a branch of Italcambio currency exchange in San Cristobal, Venezuela March 24, 2017. REUTERS/Carlos Eduardo Ramirez

In the midst of a bruising economic crisis, the leftist government of President Nicolas Maduro has not published inflation data for more than a year.

Venezuelan consultancy Ecoanalitica says inflation was 525 percent last year and New York-based investment bank Torino Capital - using one popular food item as a proxy - put it at 453 percent.

Maduro himself last year increased the minimum wage by 454 percent, saying the rise was to offset inflation.

The central bank did not immediately respond to a request for information.

A wave of anti-government unrest is underway across the country. Hundreds of thousands of people took to the streets on Wednesday, only to be dispersed with tear gas and water cannons.

One factor for high inflation is Venezuela’s soaring money supply, up more than 200 percent in the last year, its fastest rise since records began in 1940.

Purchasing power has eroded and salaries annihilated as a result. On the black market, $1,000 in savings when Maduro was elected in 2013 would now be worth less than $5.

The bolivar currency fell further against the U.S. dollar on Thursday and is now at its lowest value ever against the dollar, down 99.5 percent since Maduro came to power.

Inflation is one facet of the OPEC member’s crippling economic crisis, as it contributes to putting basic food products out of reach for millions. Maduro blames the problems on an “economic war” being waged against it by the U.S. government and opposition “terrorists.”

Many economists blame strict currency and price controls.

The IMF figure places Venezuela as the country with the second highest inflation in the world, after South Sudan which last year clocked inflation of 480 percent. The IMF did not receive Gross Domestic Product data from Venezuela’s central bank.

Reporting by Girish Gupta and Corina Pons; editing by Alexandra Ulmer and Grant McCool