CARACAS – Venezuela begins 2018 sunk in hyperinflation and full of concern about the new wage increase announced on Sunday by President Nicolas Maduro, which is only being celebrated in government circles and will unleash even greater inflation, according to many economists.
“Maduro is simply continuing with his policy of trying to put out the fire of hyperinflation, which he lit in Venezuela, with a can of gasoline,” economist Luis Oliveros wrote on the Twitter feed he shares with many colleagues.
In his year’s end speech, Maduro announced this Sunday a 40 percent increase in the minimum wage and in the salaries of civil servants which, added to the increase in the food bonus, signifies a hike in Venezuelans’ minimum income of 74 percent.
This increase leaves Venezuelans’ minimum income at $238, if the exchange rate set by the government is applied, but at little more than $7 at the parallel rate of exchange, which is used in all transactions that do not involve the Venezuelan government.
In 2017, Maduro raised seven times the minimum wage of government employees in an attempt to deal with the rising prices that shoot up every day while the bolivar continues to plummet in relation to the US dollar on the free market.
According to preliminary calculations by the financial analysis firm Ecoanalitica, inflation in Venezuela soared by 81 percent in November alone. According to those estimates, accumulated inflation in 2017 topped 2,700 percent, making it the only economy in the world with a four-digit inflation rate.
The result, according to the Workers’ Documentation and Analysis Center (CENDA), was that a household with two minimum wages has barely enough income in a month to buy a week’s basic food supply.
Faced with that situation, millions of Venezuelans depend on the government’s distribution of subsidized foodstuffs. Delays in the delivery of food products have provoked numerous spontaneous protests in lower-income districts during this Christmas season.
The Chavista government blames the situation on an “economic war” being waged by the United States, the opposition and business “speculators.”
“Who attacks the people? Who imposes a totally false, criminal mechanism to set inflated prices? The Bolivarian government, or the capitalists, the oligarchy?” Maduro asked rhetorically in his year’s end speech.