Caracas Chronicles

The threshold between high inflation and hyperinflation is 50% and a lot of volatility. Most importantly: to end a hyperinflationary episode, the monthly inflation rates must drop below 50% for at least 12 months.

Though Venezuela has a long history of two-digit inflation, we reached hyperinflation for the first time in the last quarter of 2017—no matter what information source you choose to follow.

According to official data published by our very own Central Bank (BCV), the Venezuelan hyperinflationary episode started in December 2017 and it appears it will end in december 2021 if the inflation rate stays below 50%. We would be talking about a 49-month episode, only 9 months shy of the historic Nicaraguan record of 58. 

On the other hand, the data originally collected by the opposition-led National Assembly elected in 2015 and now in the hands of the Observatorio Venezolano de Finanzas, puts the beginning of Venezuelan hyperinflation in November 2017 and its possible end in february 2022 if the inflation rate stays below 50%. This would be a 53-month episode.

In any case, inflation rates seem to be decelerating. In part, because the government turned a blind eye on all economic controls that were crippling the private sector. And it’s likely to continue if chavismo can hold its destructive instincts at bay.