Caracas (OrinocoTribune.com)—Venezuela registered a month-on-month inflation rate of 8.9% in August, an 11-percentage-point decrease from the 19.9% recorded in July, according to figures released by the Central Bank of Venezuela (BCV) on Friday, September 4.
The result represents a 55.3% reduction in the monthly pace of price increases when compared to the previous month. However, the brief BCV statement did not provide a breakdown showing how prices behaved across food, transportation, healthcare, services, and the other sectors included in the National Consumer Price Index.
“In August, a recovery in distribution channels was observed along with less pressure on the foreign exchange market, reflected in less fluctuation in the exchange rate and in the prices of goods and services,” the country’s principal monetary institution stated.
“Thus, after the initial impact of the two earthquakes on the national economy, an understandable inflation rate was once again achieved thanks to macroeconomic policy actions aimed at price stabilization,” the BCV added.
Inflation remains a central concern
Despite over five years of sustained economic recovery under illegal US sanctions, inflation, the continuing devaluation of the bolívar, and insufficient workers’ incomes remain among Venezuelans’ principal economic concerns. The August deceleration offers some relief, although it does not mean that prices fell—only that they increased at a slower rate than during July.
Calculations based on the BCV’s monthly figures showed that Venezuela accumulated approximately 200% inflation between January and August. The compounded year-on-year rate stands at approximately 535%, placing the country among those reporting the highest inflation rates worldwide.
Even with August’s improvement, prices increased by approximately 48.6% over the three-month period from June through August when the monthly figures are compounded. This illustrates the cumulative impact that several consecutive months of double-digit inflation continue to have on workers and households.
Inflation rose following June earthquakes
Monthly inflation had fallen to 6.3% in May, its lowest in 19 months, before rising to 13.8% in June and 19.9% in July. The BCV attributed the acceleration to the consequences of the June 24 double earthquake, which severely affected La Guaira and other areas, disrupting transportation, businesses, productive activity, and the distribution of goods.
When it released the July figure on August 12, the BCV described the increase as temporary and projected that inflation would decline in August because exchange-rate growth had already slowed during the final three weeks of July. Friday’s result confirms that projection, although inflation remains above the single-digit rate recorded in May.
The exchange-rate gap
The BCV stated that reduced pressure on the exchange market was one of the factors behind the August slowdown. The official exchange rate rose from 748.79 bolívars per US dollar at the beginning of August to 794.99 at the end of the month—an increase of 6.17%. This was substantially lower than July’s 17.88% rise.
By Friday, September 4, the official rate stood at 807.39 bolívars per dollar. Meanwhile, USDT prices on peer-to-peer platforms were close to 962 bolívars, putting the exchange-rate gap at approximately 19.2%. Although still significant, this remains substantially below the 40%-50% gaps reported during previous periods of currency speculation.
The exchange-rate gap creates distortions because the official BCV rate is legally used for salaries, invoices, accounting, and many formal payments. Meanwhile, numerous businesses calculate prices or replacement costs using the higher black market or USDT rate.
At Friday’s rates, for example, a salary indexed to $100 but paid at the official rate would equal approximately 80,739 bolívars. However, purchasing $100 through the peer-to-peer market would cost about 96,200 bolívars. Therefore, the worker would receive roughly 16% less purchasing power when measured against prices calculated using the unofficial reference.
This disparity particularly affects workers whose salaries or bonuses are based in dollars but paid in bolívars at the official rate. When businesses price goods using the higher parallel rate, the exchange gap operates as an additional reduction in the worker’s real income.
Higher foreign-currency supply
Economists have reported a substantial increase in the BCV’s participation in the foreign exchange market. Citing figures announced in July by then-Vice President for Economy and Finance Calixto Ortega, anti-Chavista economist José Guerra stated that the BCV supplied more than $9 billion through exchange desks between February and late July—over twice the amount placed during the same period of 2025.
More recent estimates placed the amount supplied between February and August at approximately $10.5 billion. If accurate, that figure would already be about 45% higher than the estimated $7.23 billion supplied during all of 2025. Economists estimated that July alone accounted for approximately $2.2 billion.
Despite this considerably greater supply of foreign currency, the bolívar has continued to depreciate. The official dollar rate increased by approximately 164% between the beginning and end of August 2026. Economists disagree over the reasons: some question the effectiveness of the BCV’s intervention strategy, while Chavista analysts emphasize the effects of illegal US sanctions, reduced access to international financial channels, exchange-rate speculation, private banking embezzlement schemes, and the power accumulated by private economic actors over price formation.
Economic recovery and purchasing powerIn August. the BCV reported that Venezuela’s economy grew by 7.14% during the second quarter of 2026, completing 21 consecutive quarters of economic expansion. Oil activity increased by 9.1%, while the non-oil economy grew by 5.79%.
Nevertheless, many Venezuelans report that the positive macroeconomic growth figures have not translated proportionately into salaries, purchasing power, or improved living conditions.
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August’s lower inflation rate is an encouraging development. However, sustaining that trajectory will depend on greater exchange-rate stability, continued recovery in production and distribution, and policies capable of protecting workers’ real income.
Special for Orinoco Tribune by staff
OT/JRE/SC/SF
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