March 9, 2017 / 5:31 PM / in 7 months

Venezuela Congress begins measuring inflation amid cenbank silence

Stacks of 100 bolivar notes are seen in a plastic crate at a stall in a street market near Venezuela's Central Bank in Caracas, Venezuela December 16, 2016. REUTERS/Marco Bello

CARACAS (Reuters) - Venezuela’s opposition-led congress has started publishing the country’s inflation rate based on its own data collection, as the government of President Nicolas Maduro remains silent about the crisis-stricken nation’s soaring consumer prices.

The legislature has enlisted economics students to collect price data in five cities and asked former central bank employees to process it using the central bank’s methodology, said legislator Jose Guerra, an economist and former researcher at the bank.

Their measurements show prices rose 741 percent in the 12 months to February, 20.1 percent last month alone and 42.5 percent in the first two months of 2017.

Venezuela’s most recent official inflation figures, released last year, showed prices rising 180.9 percent in 2015.

“We’re not trying to substitute the central bank. We are filling the vacuum left by the central bank as a result of it not publishing the figures,” Guerra said in an interview.

The central bank did not immediately respond to an email seeking comment.

Venezuela’s economy has been in free fall since the 2014 collapse of oil prices, which left the socialist economic system unable to maintain an elaborate system of subsidies and price controls that functioned during the oil boom years.

Venezuela's Central Bank President Nelson Merentes talks to the media as he presents the "new family" of Venezuelan coins and notes in Caracas, Venezuela December 7, 2016. REUTERS/Marco Bello

Maduro says his government is the victim of an “economic war” led by political adversaries with the help of Washington.

The government has kept quiet about fundamental economic indicators including economic growth and balance of payments amid an increasingly dire panorama of swelling supermarket lines and worsening shortages.

People queue to deposit their 100 bolivar notes, near Venezuela's Central Bank in Caracas, Venezuela December 16, 2016. REUTERS/Marco Bello

The absence of inflation figures has everyone from workers to business owners unable to make basic economic calculations.

“Workers don’t know what their salary is, companies don’t know what their costs are,” Guerra said. “There’s no way to calculate the real interest rate. There’s no way to calculate the real exchange rate.”

He said the project already has drawn the interest of Wall Street banks, which are closely monitoring the country’s economy on concerns it could default on its high-yielding dollar bonds.

Measuring inflation is unusually complicated in Venezuela, because consumer products as well as hard currency fetch vastly different prices depending on whether or not they are distributed to the socialist economy’s subsidy system.

Consumers can sometimes obtain basic goods at low-cost prices by waiting for hours in supermarket lines but increasingly have to buy such goods from smugglers on informal markets for more than 10 times the officially mandated prices.

Writing by Brian Ellsworth; Editing by Alexandra Ulmer and Bill Trott

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