Cedice estimates July inflation at 13.50%, with a 738.79% annual increase

Venezuela's inflation rate in July was estimated at 13.50% in local currency, according to Cedice Libertad's Observatory of Public Spending (OGP). However, in U.S. dollar terms, inflation saw a monthly decrease of 3.91%.

This data places the year-on-year inflation rate at 738.79% in national currency and 35.17% in foreign currency as of July 30. Cedice attributes the difference between its figures and those reported by the Central Bank of Venezuela (BCV) to methodological and geographic variations, though it notes a general coincidence in price trends.

The impact on Venezuelan households remains significant. In July, the average consumption of 61 goods and services for a family of three in Caracas, Valencia, and Maracaibo cost 656,239.61 bolivars, equivalent to $885.49. This expenditure represents 6.7 times the average integral salary, meaning more than one and a half weekly salaries are needed solely for fundamental necessities.

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When the gap between the official and parallel exchange rate narrows, as has occurred recently by around 15%, the need for formal commerce to incorporate compensatory surcharges in dollars due to being forced to invoice at the official rate decreases.

Caracas recorded the highest monthly inflation in bolivars at 15.32%, followed by Valencia (13.42%) and Maracaibo (11.99%). Valencia, however, had the most expensive basket of goods in absolute terms, costing $917.59, followed by Maracaibo ($897.70) and Caracas ($825.09).

Oscar Torrealba, coordinator of Cedice's Inflaciómetro, explained that the decrease in dollar-denominated prices is linked to the narrowing gap between official and parallel exchange rates. This reduces the need for formal businesses to add surcharges in dollars when forced to invoice at the official rate. Despite this adjustment, Torrealba cautioned that the overall cost of living in dollar terms has still increased by 35.17% over the past twelve months.

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This adjustment downward in the dollar expression of the basket does not mean a structural cheapening of the cost of living, which accumulates a dollar increase of 35.17% in the last twelve months.