CARACAS, July 8 (Reuters) - Venezuela’s inflation has reached its highest level since the country started measuring the indicator over 60 years ago, according to calculations by private economists who are seeking to make up for a lack of official figures on prices for this year.
Inflation is evident in the streets, however, as consumers struggle with wads of near-worthless bills, the largest of which can no longer even buy a chocolate bar.
Prices rose 108 percent in the 12 months ending in May, according to the average of estimates by nine analysts consulted by Reuters, topping the 103 percent rate of 1996 that followed an economic shock package.
The OPEC nation’s state-led economy has been crippled by price controls and a three-tiered currency control mechanism, which President Nicolas Maduro has been reluctant to overhaul because of the short-term impact to the economy.
“Venezuela’s inflation is the result of not making decisions,” said Tamara Herrera of Caracas-based Sintesis Financiera, who estimated inflation at 118 percent.
Investment banks such as Barclays and JP Morgan are making calculations based on variables such as tax collection, the depreciation of the local bolivar currency on the black market exchange rate, and leaks of official data made public by opposition leaders.
Economists see annual inflation between 150 and 200 percent by year-end.
Maduro blames the woes on political adversaries who have launched an “economic war” with the support of Washington, and says opposition leaders are exaggerating the extent of the problem.
Banks say cash machines go empty twice as fast as they did a year ago and are asking the central bank to print bills with bigger denominations because the 100 bolivar note, the largest, is now worth less than 20 U.S. cents at the black market rate.
The central bank, instead, has nearly doubled the supply of 100 bolivar notes. Economists note that Venezuela is not yet suffering from hyperinflation like that seen in Argentina and Peru in the 1980s.
The central bank reported 2014 inflation at 68.5 percent but has not disclosed any figures for inflation or economic growth for 2015.
Unions are therefore unsure what to ask for in wage negotiations, banks cannot determine their inflation-adjusted earnings, and shopkeepers struggle to figure out how to set prices.
“We have to revise prices every week. They change so quickly that the estimates we give customers are valid only for two days,” said Vladimir Flores, an employee of a Caracas hardware store. (Writing by Brian Ellsworth; Editing by Leslie Adler)