Unemployment Drops (in Venezuela)

Venezuelan Inflation Increases Slightly as Unemployment Drops

May 8th 2009, by James Suggett – Venezuelanalysis.com

Mérida, May 8^th 2009 (Venezuelanalysis.com) -- Monthly inflation in Venezuela rose from 1.2% in March to 1.8% in April, while unemployment dropped from 9.5% in January to 7.3% in March.

The increase in inflation in April reflected the government's increase in the sales tax from 9% to 12% that month as an austerity measure to maintain the government's social programs during the world economic downturn.

The greatest increase in price inflation in April was in transportation, reflecting the adjustment of bus fares in several states. The price group with the least inflation was food and non-alcoholic beverages, for which prices did not change.

Inflation accelerated in communications, restaurants and hotels, recreation and culture, clothing, home furnishing, and miscellaneous goods and services, while inflation decelerated in educational services, utilities, health, rent, and alcohol and tobacco.

The inflation rate in April was only slightly higher than the 1.7% inflation in April of last year. Also, the inflation rate over the first four months of 2009 was 6.7%, significantly lower than the inflation rate over the first four months of 2008, which was 8.9%.

Over the past twelve months, cumulative inflation in Venezuela was 25.2%.

Unemployment

The unemployment rate of 7.3% in March represents a re-stabilization of unemployment since Venezuela's normal seasonal increase in January. Last year, unemployment averaged 7.4%, with a high of 10.2% in January and a low of 6.1% in November.

Venezuela's unemployment rate has dropped during the presidency of Hugo Chávez over the last ten years, from 14.6% in March 1999 to 7.3% in March of this year.