Venezuela GDP Sinks Amid Rampant Inflation: Central Bank Report

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Venezuela’s central bank published updated gross domestic product and consumer price data Friday that showed the economy to be in the throes of a deepening contraction amid runway inflation.

GDP fell 26.8% in first quarter 2019 from same period in 2018, the bank said in a report posted on its website, and 19.6% in 2018. Meanwhile, consumer prices rose 52.2% in September, up from 34.6% in August and 19.4% in July, the bank said. In the first nine months of 2019, consumer prices have risen 4,679.5%.

The CPI and GDP figures are what might be expected from an economy devastated by war rather than from the country with the world’s biggest oil reserves.

In May, the bank published key economic data for the first time since 2015, showing that inflation spiraled out of control to 130,060% in 2018 from 862.6% in 2017, while the economy shrank 22.5% during the third quarter of 2018 from same period in 2017.

As a comparison, Bloomberg’s Cafe Con Leche Index shows Venezuela’s annual inflation rate at 16,371% whereas the International Monetary Fund projects a rate of over 200,000% for this year.

After Venezuela suspended the publication of growth and inflation data in the midst of the unprecedented crisis, the IMF warned of possible sanctions for withholding statistics and the central bank complied by sharing the figures with the Washington-based lender late last year.

After years without publishing new data, Venezuela’s National Institute of Statistics, controlled by Nicolas Maduro’s government, published figures showing that, despite the devastating crisis, poverty fell 3 percentage points between 2014 and 2018 from 20.4% to 17.3%. Extreme poverty dropped 1 percentage point in that period from 5.4% to 4.3%.

To contact the reporter on this story: Alex Vasquez in Caracas Office at avasquez45@bloomberg.net

To contact the editors responsible for this story: Patricia Laya at playa2@bloomberg.net, Robert Jameson

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