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Economic recovery contrasts with persistent food insecurity

  • Key Message Update
  • Venezuela
  • March 2024
Economic recovery contrasts with persistent food insecurity

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  • Key Messages
  • Key Messages
    • Despite a significant reduction in inflation rates, lower price volatility and stability in food supply, the majority of poorer households continue to face Stressed (IPC Phase 2) outcomes through September due to the cumulative effect of years of very high inflation and significantly below normal purchasing power. Additionally, pockets of the population – very poor households earning in VED, who do not receive international remittances and have limited access to social programs, particularly in the peri-urban areas of the Capital District, Guárico, Barinas, Apure and Zulia, and small farmers in drought-affected areas of Amazonas and Delta Amacuro – are expected to be in Crisis (IPC Phase 3) throughout the analysis period. 
    • According to Síntesis Financiera, annual and monthly inflation rates have decelerated in February to 75.9 percent (the lowest figure since August 2012) and 1.2 percent, respectively, due to greater exchange rate stability attributed to the Central Bank of Venezuela’s measures, Chevron's participation in the exchange market, and lower demand for dollars during the tax season. Despite these improvements, inflation could increase moderately due to the possible expansion of public spending from increases in the frequency of delivery or improvement in quality of the CLAP (Comités Locales de Abastecimiento y Producción) and Sistema la Patria vouchers during the electoral period. The expiration of General License 44 at the end of April could contribute to accelerate the trend, although the continuity of Chevron's operations in the country could mitigate this impact. Nevertheless, the impact of inflation on the population's access to food remains significant.   
    • Food prices are stable compared to January 2024, but still significantly higher than last year. In February, prices of a basic diet of cereals and oil and a diversified diet both remained stable, with price changes less than 5 percent in both VED and USD. The prices of cereals (rice, pasta, maize flour), meats (chicken, ground beef, and eggs), and some substitutes such as ahuyama and yucca remained at similar levels due to greater stability in VED and moderation in import prices. Although this stability is a relief, the monthly minimum wage is still insufficient to cover the cost of the basic food basket. The sustained price increases in recent years have eroded the purchasing power of Venezuelans, making access to adequate food difficult. 
    • Although there was scattered and moderate rainfall in recent weeks in the states impacted by the drought (Amazonas and Delta Amacuro), it has not been sufficient to cover the water needs of smallholder farmers who do not have irrigation. In the coming weeks, moderate to heavy rainfall is expected in the west of the country (Zulia, Táchira, Mérida, and Trujillo) and moderate rainfall in the south (Apure, Guárico, and Barinas). However, the expected amounts are insufficient to reverse the accumulated deficits and arid conditions in the most affected states. In addition, temperatures will continue to be above average, which will contribute to soil moisture loss. Therefore, it is likely that smallholder farmers in these areas will see a reduction in their crop yields, especially maize, which will be harvested in May. Despite this, a portion of these households will manage to improve their situation starting in March because of the seasonal increase in income due to higher demand for labor. It is expected that the income generated during the rainy season will partially compensate for the low yields and allow them to cover their food needs between their own production and market purchases.

    Recommended citation: FEWS NET. Venezuela Key Message Update March 2024: Economic recovery contrasts with persistent food insecurity, 2024.

    This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.

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