Tracking Venezuela’s inflation by Bloomberg Cafe Con Leche Inflation Index

It is around 1526% as per this new index:

Inflation is soaring in Venezuela. Everyone knows that.

But how high is it really? 250 percent a year? 500 percent? 1,000 percent? None of the above? In the absence of official data — the government long ago stopped publishing figures on a regular basis — economists are left to dial up what are, essentially, wild guesses.

Enter the Bloomberg Cafe Con Leche Inflation Index.

In an effort to fill the void, Bloomberg News has launched its own inflation gauge. It’s not necessarily the most scientific in the world, true. As the name would suggest, it tracks just one item: a cup of cafe con leche served piping hot at a bakery in eastern Caracas. For all of the index’s shortcomings, it has merits too: it’s tangible; tracked regularly; and, given that it monitors a product consumed by Venezuelans everyday, provides a unique, up-close look at inflation in one of the most dysfunctional economies on earth.

The index debuts today at an annual rate of 1,526 percent, the result of the price having soared from 450 bolivars per cup to 1,100 bolivars* over a span of 17 weeks. At this pace, or anything even remotely close to it, Venezuela would have the highest inflation in the world. Stay tuned for further readings in coming weeks.

 

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