Despite the continued slowdown in inflation, Stressed (IPC Phase 2) outcomes are expected across the country

• The highest area-level outcome in Venezuela will be Stressed (IPC Phase 2) between June 2024 and January 2025. Following the economic crisis that has affected millions of households, macroeconomic improvements and the reactivation of various economic and agricultural activities have reduced the population in need. However, a portion of the poorest households are expected to remain in Crisis (IPC Phase 3) through January. Needs are estimated to persist for between 1.0 and 1.5 million people.
• After several years of some of the highest inflation rates in the world, monthly and annual rates are expected to stay below 5 and 100 percent, respectively, through January. This is a relief for poor households who have had their budgets pressured by volatile prices in the local currency. The continuation of informal dollarization and recent increases in public spending — raising some vouchers and improving the content of subsidized food boxes (CLAP) — are combining to improve food access. 
• Given the macroeconomic context, the population of concern continues to be very poor households that lack income sources in USD and that have limited access to international remittances and/or social programs. Although they are spread across all urban and peri-urban areas of the country, there will be concentrations around the capital and in Anzoátegui, Monagas, Sucre, and Zulia states. 
• Between June and September the food security situation is expected to remain stable. Between October and January, a slight improvement is expected due to the holiday season, which brings holiday bonuses, an increase in labor demand, and higher remittance flows to the country. A portion of households are expected to improve from Crisis (IPC Phase 3) to Stressed (IPC Phase 2) during this time.

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Follow these links for additional information: 

• Latest Venezuela Remote Monitoring Report: February to September 2024
• Latest Central America, Colombia, Venezuela, and Haiti Seasonal Monitoring: June 2024
• Overview of FEWS NET's Scenario Development Methodology
• FEWS NET's approach to estimating the population in need

For the past decade, Venezuela has experienced an economic and social crisis characterized by the accelerated loss of purchasing power due to currency depreciation, high inflation rates, and the deterioration of productive and industrial capacity, especially agricultural and oil production. In this context, household income generation has been reduced, limiting access to food. The volatility of the local currency gave way to the progressive informal dollarization of the economy, as a strategy to preserve purchasing power and facilitate commercial transactions. The crisis also resulted in a significant flow of millions of Venezuelan migrants to other countries; mainly within South America, with Colombia being the primary recipient, followed by Peru and Ecuador. However, after the peak of the economic crisis between 2014 and 2020, the country has experienced progressive economic stabilization, driven by lower inflation rates, greater exchange rate stability, and the gradual recovery of the productive structure. Since 2021, monthly and annual inflation rates have slowed considerably and remain below 5 and 100 percent, respectively. 

Nearly 90 percent of the population lives in urban areas and household incomes come from various sources (wages, remittances, and social protection system). Most employees in the formal or informal private sector receive salaries in USD, while the public sector pays in VED. However, half of the transactions in metropolitan areas are made in USD. Households receiving salaries in VED are more vulnerable to experiencing losses in their purchasing power due to VED fluctuations and the conversion to USD for daily transactions. Public sector salaries are set in local currency, creating disparities between private and public incomes. For the poorest households, informal labor predominates, with activities such as street vending, odd jobs, and small enterprises. In rural areas, especially in Guárico, Cojedes, Portuguesa, and Barinas, family farming is very important for the poorest households. Another important source of income is remittances, which vary in amount and frequency of receipt but also help stimulate the local economy, although only a portion of households receive them. In 2023, remittances were estimated to have reached 3.725 billion USD (4 percent of GDP), 10 percent more than in 2022, highlighting the importance of these flows for Venezuelan household consumption. 

The social protection system in Venezuela includes programs that cover food needs, such as the Sistema la Patria system of bonuses (monthly payments indexed in USD and paid in VED), CLAP (Comités Locales de Abastecimiento y Producción, subsidized food boxes regularly delivered to households based on their composition), and the Cesta Ticket (an electronic food voucher provided to public and private sector employees). Public workers and pensioners, who receive their income in VED, are the main beneficiaries of most bonuses. However, CLAP and the Cesta Ticket cover a significant percentage of the population. According to a survey funded by international donors in late 2023, 82 percent of the population reported receiving CLAP boxes, while 62 percent reported receiving government financial transfers during the year. However, the distribution of bonuses and CLAP vouchers and bags can be irregular and not all the poorest households have access to them. 

Due to macroeconomic conditions, the prices of staple food basket products in VED often vary significantly over short periods. A staple diet for most households includes rice, flour, bread, pasta, oil, or margarine, and substitutes such as plantain, pumpkin, and cassava, while chicken and eggs are the main sources of animal protein. However, households adjust their purchasing preferences depending on prices and seasonality. 

National production is organized into two annual harvest cycles: between February and May, and between September and December, harvesting maize, rice, beans, cassava, plantain, and vegetables. Since 2020, a combination of government interventions and improvements in macroeconomic conditions has halted the decline in agricultural production, although it remains below the levels reported during the reference year (2013). This trend places more pressure on cereal imports to meet domestic food needs, which typically account for 57 percent of the domestic supply. Nonetheless, food availability has improved since 2020, and markets are supplied with both national and imported products. 

National

• The monthly and annual inflation rates in Venezuela show a decelerating trend. In May, the monthly inflation rate stood at 1.5 percent, while the annual rate, although still high at 59.2 percent, was the lowest since February 2014. A similar trend is observed in food inflation, with monthly and annual variations of 1.9 and 53 percent, respectively. The slowdown is attributed to the moderation of public spending, reduced volatility of the local currency, and the freezing of the minimum wage for the third consecutive year.
• In May, the local currency remained stable compared to the previous month but depreciated by about 50 percent compared to May 2023. The Central Bank of Venezuela (BCV) increased foreign exchange sales to stabilize the exchange rate. 
• During the same period, public spending grew by only 4 percent, a slowdown compared to the 8 percent observed the previous month, but it could increase to 17 percent in June due to the upcoming elections. This increase in spending has improved the quality and quantity of the CLAP bag contents but did not necessarily increase the frequency of distribution. Due to the extension of the tax payment deadline and higher revenues from audits, tax collection covered 71 percent of public spending.
• The cost of a simple diet of cereal and oil and of a diversified diet remained relatively stable in May. The cost of the simple diet experienced a slight decrease of 1.4 percent in USD, while its price in VED increased by 1.1 percent, reaching approximately 107 USD or 4,301 VED. The diversified diet saw a monthly drop of 1.6 percent in USD, but its value in VED increased by 1.4 percent, reaching 232 USD or 9,303 VED. 
• Since the onset of the rains, rainfall deficits have persisted in localized areas of Falcón, Lara, Portuguesa, Guárico, Anzoátegui, Monagas, and Bolívar, reflected in vegetation health (Figure 1), while the entire country is experiencing above-average temperatures. However, agricultural production is progressing normally with the season due to irrigation.

Humanitarian food assistance

• According to the Food Security Cluster, between January and April 2024, more than 43,000 people received humanitarian food assistance with basket deliveries to households and community and health centers. However, their deliveries are targeted and do not reach sufficient numbers of people to change the food security classification at the area level. 

National assumptions

• The BCV is expected to continue its exchange intervention to contain the depreciation of the VED. Adequate USD availability and local currency stability are expected to keep the monthly inflation rate below five percent and the annual rate below one hundred percent through January 2025. The volume of oil production and export is estimated to increase by 9 and 10 percent, respectively, compared to 2023. However, the sale of discounted oil due to the reinstatement of sanctions on Petróleos de Venezuela S.A (PDVSA) could reduce the availability of foreign currency and limit the BCV's exchange interventions.
• Public spending and, consequently, social programs will fluctuate due to elections and seasonal factors through January 2025. An increase in public spending is expected during the pre-election period, along with the continuation of improved quality and quantity of CLAP bag contents. After the elections, this trend is expected to moderate, and social programs such as Cesta Ticket, La Patria bonuses, and CLAP are not anticipated to report significant increases through September. From October, due to holiday bonuses, a possible second round of elections, and the 2025 regional and legislative elections, spending could see a resurgence but is expected to remain controlled through January 2025, with gradual adjustments based on economic developments and government priorities. 
• Local and imported food prices in VED, and to a lesser extent in USD, are expected to increase moderately due to currency stability and improved food availability. 
• Above-average rainfall is forecasted for most of the country through the end of the year. This will likely result in a normal start to maize and rice planting activities and an increase in planted areas due to the progressive recovery of production. This year, rice production will increase by 23 percent, reaching 381,000 MT, reducing imports to ensure reserves and cover CLAP at 90,000 MT, which will also support price stabilization. 

Humanitarian food assistance

National assumption

• Although the official plans of the Food Security Cluster for the delivery of humanitarian food assistance are not yet public, deliveries are expected to remain targeted for the rest of the analysis period, without changing the classification phase in any state.

Since the beginning of the year, annual inflation has decreased significantly, from 189 percent in December 2023 to 59 percent in May. This slowdown has been a relief for households that rely on market purchases to meet their food needs. Due to the intervention of the BCV, the devaluation of the VED has slowed down, and macroeconomic conditions continue to improve. In addition, the informal dollarization of the economy persists, and part of the population is receiving its income in USD, which is also improving purchasing power. Markets remain supplied due to imports and improved domestic production, resulting in increased cereal availability during the second half of 2024. Favorable weather conditions, increased planting areas, and agricultural recovery, which still faces financing challenges, have resulted in a 23 percent increase in national rice production compared to the previous cycle and a 5 percent increase in maize production. Although production has improved, Venezuela continues to depend on imports. By September, imports will need to increase to meet total domestic demand while the harvest is being brought in. A slight increase of 2 percent in wheat imports is also expected due to increased consumption. 

Ahead of the elections, public spending has been directed toward increasing social programs, including, more recently, the increase in the Integral Minimum Income in May. Although the minimum wage is unlikely to increase, additional bonuses and CLAP box coverage have improved food access for households in recent months. School feeding programs have provided additional support. These programs, driven by the WFP and its Cluster partners, have served 475,684 people (54 percent girls and women) with food deliveries in approximately 2,000 schools in eight states through April. The program is expected to continue in 2024 with the same level of support. 

Considering these factors, most of the poorest urban households in Venezuela can meet their basic food needs given their various income sources, especially in USD, remittances, and social programs. However, low wages in the informal sector and high food prices are limiting their purchasing power, with many households resorting to strategies such as spending their savings, buying cheaper food, or accumulating debt to meet their needs, resulting in Stressed (IPC Phase 2) outcomes. Meanwhile, some households, especially those receiving income in VED, with limited access to USD income, remittances, and/or social program benefits, are facing greater difficulties and are likely to experience food consumption gaps or adopt unsustainable coping strategies, placing them in Crisis (IPC Phase 3). Although these populations are dispersed in urban and peri-urban areas, slightly higher concentrations are expected in the Capital District, and in Anzoátegui, Monagas, Sucre, and Zulia states. However, the portion of these households is not sufficient to change the area-level food security phase to Crisis (IPC Phase 3).

Between June and September, inflation, prices, and social programs are expected to remain stable, with a moderation in public spending after the July elections. Between October and January, a slight improvement is expected due to the holiday season, which brings holiday bonuses, increased informal work and tourism, and higher remittance flows to the country, boosting economic activity. A portion of households is expected to improve their situation from Crisis (IPC Phase 3) to Stressed (IPC Phase 2), and some may even advance to a better phase during this period.

Additionally, the food security situation of small farmers in Venezuela will improve during the analysis period, with most moving from Crisis (IPC Phase 3) to Stressed (IPC Phase 2). Above-average rainfall in most regions, including agricultural areas of Llanos, Andes, Caribbean, and Oriental, will improve vegetation moisture conditions and allow for the main maize and secondary rice harvest between August and October, as well as vegetables in October. This will generate greater demand for agricultural labor, ensuring income for these households and increasing the production of grains, tubers, and vegetables. 

National 

Event: The impact of a tropical storm or hurricane

Likely impact on acute food insecurity outcomes: Depending on the trajectory and magnitude of a possible tropical storm or hurricane, direct and indirect impacts could include heavy rains with flooding, soil erosion, landslides, and mudslides. This could also alter crop production prospects, damage communication routes, and negatively affect other sources of income and food, increasing the population in Stressed (IPC Phase 2) and/or Crisis (IPC Phase 3).