Venezuela’s inflation falls 11 percentage points in August to 8.9%

Venezuela’s inflation rate fell sharply in August, reaching 8.9% after rising to 19.9% in July, the Central Bank said on Friday.

The bank attributed the slowdown to a recovery in distribution channels and weaker pressure in the foreign-exchange market. It said the exchange rate and prices for goods and services showed smaller increases.

“Thus, after the initial impact of the two earthquakes on the national economy, a rate of inflation consistent with macroeconomic policy measures aimed at price stabilization has been achieved again,” the Central Bank said.

Inflation had reached 13.8% in June before rising in July amid an emergency caused by damage from the two earthquakes, which mainly affected northern Venezuela. The World Bank estimated in July that the quakes had caused $19.6 billion in direct physical damage and warned that a slow reconstruction could hamper the country’s economic recovery for the next decade.

Experts say one of the main drivers of price increases remains the rising value of the dollar, which serves as Venezuela’s principal reference for pricing goods and services. They link that dependence to the effects of the hyperinflation Venezuela experienced between 2017 and 2021.

“

Thus, after the initial impact of the two earthquakes on the national economy, a rate of inflation consistent with macroeconomic policy measures aimed at price stabilization has been achieved again.