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October 10, 2013

Venezuela inflation just shy of hitting 50% for year

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Annual inflation in Venezuela hit 49.4 percent in September, up from 18 percent a year ago, and basic goods became harder to find, the Central Bank reported Thursday.

The soaring consumer price index gives Venezuela the highest inflation in the hemisphere and one of the highest in the world.

In September alone, inflation spiked 4.4 percent, driven by agricultural goods, transportation, education expenses and a 19.3 percent hike in electricity prices, the government said.

The new figures are ammunition for an opposition that is trying to turn December’s municipal election into a referendum on the six-month administration of President Nicolás Maduro. Inflation is a pocketbook issue as it saps consumers’ purchasing power.

The Central Bank also reported that the “scarcity index,” which measures the availability of basic goods, hit 21.2 percent in September versus 13.6 percent a year ago. The bank said that excluding auto parts, corn oil and sunflower oil, the scarcity index would be at 15.3 percent.

Maduro has blamed rising prices and chronic shortages on hoarding, speculation and an “economic war” waged by his rivals. The government raised minimum wage 20 percent in May and 10 percent in September. Wages are going up an additional 10 percent next month. Earlier this week, Maduro asked parliament for the right to rule by decree for 12 months to the fight the economic battle and squash corruption. The National Assembly is expected to vote on the measure in coming weeks.

Henrique Capriles, the opposition governor of Miranda State, is asking his colleagues at the National Assembly to keep Maduro from seizing more power.

“Decree powers are not going to help bring down inflation, or raise salaries, or guarantee that hospitals are stocked,” he said Thursday. “It’s just a smokescreen to keep us dizzy.”

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Comments

howell clark

HOW IS AN EFFECTIVE 45.2% WAGE INCREASE NOT GOING TO CAUSE MASSIVE INFLATION IN A CONTROLLED ECONOMY. MADURO WILL HAVE TO BECOME AN ABSOLUTE DICTATOR TO SURVIVE THESE MANIPULATIONS.

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jim wyss

Inside South America is written by Jim Wyss, the South America bureau chief for the Miami Herald and McClatchy Newspapers.

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