Inflation is roaring back in Venezuela, threatening to undermine the fragile economic recovery orchestrated by President Nicolas Maduro and rekindle a migration wave that had just begun to ease.
Prices have soared at an annual rate of 359% over the past three months, according to an index compiled by Bloomberg. While that’s well down from the wildest hyperinflationary highs of recent years — the index clocked in around 300,000% back in 2019 — it’s up markedly from earlier this year.
The spike in prices reveals an important policy shift by Maduro. After years of reining in spending and cutting a bloated budget deficit, the government is loosening the purse strings again, shelling out cash for everything from holiday bonuses to handouts for Socialist party loyalists.
All that additional cash in the economy is fueling declines in the bolivar’s value against the dollar and driving consumer prices higher.