Venezuela closed 2025 with the highest inflation rate on the planet, after US sanctions and political turmoil combined to devastate household purchasing power across the oil-rich South American nation.
The Central Bank of Venezuela released data on Friday, March 6, showing full-year inflation reached 475 percent in 2025, the highest in the world, far surpassing the International Monetary Fund’s (IMF) forecast of 269.9 percent. The bank, which had not published inflation figures in more than a year, also reported that accumulated inflation for the first two months of 2026 already stood at nearly 52 percent, though it offered no projection for the remainder of the year.
The sharp deterioration reflected the combined weight of political turmoil and US sanctions, which battered public finances and intensified price pressures throughout the year. Washington eventually removed former president Nicolas Maduro from office in a military operation in Caracas on January 3, following years of diplomatic standoffs.
The burden has fallen hardest on ordinary Venezuelans. Average monthly incomes are estimated at between $100 and $300, well below what households need to cover basic food costs. Food and drink prices climbed 532 percent last year, rent rose 340 percent, and healthcare costs jumped 445 percent, according to the central bank. “This inflation is killing us,” said Eduardo Sanchez, a leader of the teachers union, blaming the country’s economic policies for the crisis.
The data revived fears of a return to the hyperinflationary chaos of 2017 to 2021. The worst point came in 2018, when annual prices surged by roughly 130,000 percent, driving millions of Venezuelans to emigrate. By 2024, inflation had retreated to 48 percent, a turnaround credited largely to Maduro’s former deputy Delcy Rodriguez, now the country’s acting leader.
Rodriguez stabilised the economy through stricter fiscal discipline, stopping the printing of money, easing exchange controls, and effectively allowing the US dollar to become the country’s dominant currency. Since taking power, she has opened the oil sector to private investment and is working to overhaul mining laws to attract foreign capital into critical minerals.
Economists are cautiously optimistic about the path ahead. Tamara Herrera, director of the consulting firm Sintesis Financiera, said she expects inflation to fall to just above 100 percent this year. “Going forward, the inflation expectation is toward moderation,” said economist Jesus Palacios.
