Market News

Venezuela monthly inflation hits 28.5% in May, central bank says

CARACAS, June 16 (Reuters) - Venezuelan consumer prices rose 28.5% in May, more than the 24.6% rate reported in April, central bank data showed on Wednesday, as the crisis-stricken OPEC nation struggles to contain inflation.

The price increases in May brought the annual inflation rate to 2,719%, according to Reuters calculations based on central bank data. Venezuela’s monthly minimum wage is now equivalent to just over $3, meaning many in the poverty-stricken nation depend on remittances from relatives abroad or side gigs to survive.

Years of hyperinflation and a devastating economic recession have led Venezuelans increasingly to adapt the U.S. dollar for day-to-day commercial transactions. President Nicolas Maduro, who blames U.S. sanctions for the South American country’s economic woes, has embraced the move as an “escape valve.”

But the recession in the once-prosperous country began well before Washington implemented sanctions affecting Venezuela’s oil industry in 2017, and critics attribute inflation primarily to the government’s excessive printing of bolivars to cover gaping budget deficits.

May’s consumer price increases were led by a 63.4% hike in the cost of home appliances and a 41.3% rise in healthcare costs, as the country experiences a second wave of the novel coronavirus with a weak public health system and a slow start to its vaccination campaign.

Reporting by Mayela Armas Writing by Luc Cohen; Editing by Cynthia Osterman