VENEZUELA 2016–2019

Venezuela’s Hyperinflation: The Run-Up Our Data Actually Shows

On August 20, 2018, Venezuela cut five zeros from its currency. It raised the minimum wage 3,000% the same day. That didn’t hold for long. Any venezuela money supply hyperinflation search turns up that collapse, 2016 to 2019. This episode is one of ten in our hyperinflation examples hub. It’s the one where our own data comes closest without reaching the event itself. We hold Venezuela’s money supply from 2001 to August 2014 — the run-up, not the collapse. Nobody else charts that stretch.

Venezuela’s broad money supply grew 76.6% in the year to August 2014. Over the prior decade it grew 45.9% a year — a doubling every 1.8 years, before hyperinflation was declared. The IMF later projected 1,000,000% price inflation for 2018. Venezuela’s central bank eventually confirmed 130,060%. Our series holds neither figure. It ends in August 2014.

The run-up our own data actually shows, 2001–2014

Money supply doesn’t wait for a government to declare a crisis. Venezuela’s broad money grew at a 45.9% average annual rate between 2001 and August 2014. That pace doubles the currency stock every 1.8 years. It ran that way for a full decade, not one bad month. By the final observation in our series, year-on-year growth had sped up to 76.6%. Every incumbent retrospective on Venezuela’s hyperinflation opens the story in 2016. Ours ends there instead. It shows the run-up that was already building for over a decade. The full series, month by month, sits on our Venezuela money-supply page.

The official exchange rate our own dollar figure runs on

Our $268.19 billion USD figure for August 2014 uses the World Bank’s period-average PA.NUS.FCRF rate. We apply it the same way to every country we hold — see our methodology for how. Divide the two figures in our own series and the implied rate is 6.28 bolívars to the dollar. That’s the period average of Venezuela’s official rate, fixed at 6.30 since February 2013. It isn’t a market rate. Parallel-market trackers such as DolarToday quoted the bolívar in the 80s per dollar around our last observation in August 2014. We don’t hold that series and can’t check it against a primary source. Even so, it is roughly ten to fourteen times weaker than the official rate our figure is built on. Our country-sensitivity policy requires this note. An official statistic under active capital controls isn’t the same object as a market price. A USD figure computed from the official rate overstates the currency’s real value by that same multiple. We report the series and the rate we used. We don’t substitute a market estimate we can’t source consistently.

Why the series stops in August 2014 — and why that’s the story

A government that stops publishing its own money supply is a leading indicator. It isn’t a data-quality footnote. Venezuela’s central bank, the BCV, went through years of delayed and irregular reporting starting around 2015. Its official inflation data went dark for roughly a year and a half, starting in early 2016. By 2017, the IMF’s own World Economic Outlook reports said so directly: Venezuela’s inflation figures were IMF staff estimates, not official statistics, because the government had largely stopped publishing them. Our own series shows the same collapse in reporting, just one indicator earlier. Broad money is the series that goes dark first — before the price data most retrospectives quote even becomes a live argument.

What happened after our chart ends: the 2016–2019 collapse, cited

None of the following is in our data. It’s cited externally, because the episode sits entirely after our last observation. This is the Cagan definition (50% per month) applied to a currency collapse our own series never reaches.

Steve Hanke’s Troubled Currencies Project, at Johns Hopkins and Cato, dated Venezuela’s entry into hyperinflation to November 2016. That used Hanke’s own day-by-day implied-rate method. The IMF’s July 2018 World Economic Outlook Update forecast inflation reaching 1,000,000% by year’s end. The fund compared the projected pace to Germany’s in 1923 — the same Weimar Republic 1923 episode we cover separately, with none of our own data either. Its October 2018 WEO then raised the same year to 1,370,000%. Venezuela’s central bank didn’t confirm or deny that forecast at the time. It wasn’t publishing. The BCV finally released its own figures in 2019, after years of silence. It put cumulative 2018 inflation at 130,060% (Reuters, May 2019). Venezuela’s opposition-controlled National Assembly tracked prices independently, because it didn’t trust the government’s numbers either. It put the same year far higher — around 1,698,488%, by its own January 2019 estimate (Reuters, AP). Three institutions, one twelve-month stretch, no two figures alike. We don’t average them into one number. Each is attributed to the body that published it, and the date it published it. Compare how other episodes in this cluster actually resolved in how hyperinflation actually ends — dollarization for Zimbabwe 2008, a currency board for Argentina 1989, a hard peg for Yugoslavia 1994, a land-backed currency for Weimar. Venezuela 2016–2019 isn’t on that page yet. By our own data, it hasn’t reached an ending we can chart.

The redenominations: fourteen zeros in thirteen years

Fourteen zeros disappeared from the currency between 2008 and 2021. That’s three separate rounds of currency redenomination, none of them a fix on their own. The August 2018 round landed the same day as the 3,000% wage hike referenced above. A currency reform and a wage shock, announced together — the pattern this page opened with. Zimbabwe ran a longer version of the same pattern. It chopped zeros three times before giving up on its own currency and adopting dollarization outright.

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