By Jeremy Morgan
Latin American Herald Tribune staff

CARACAS – You weren’t imagining things, and now it’s official: Venezuela’s capital is the most expensive city in Latin America, and it’s zooming up the world cost of living league at a rate of knots.

Living in Caracas is now said to be more expensive than scraping by in London, Madrid, Miami and Tel Aviv, among other cities, according to a survey carried out by a United States-based consulting company, Mercer.

Caracas has frog-leaped 59 places from 74th in the world a year ago to 15th most expensive city to live in this year. The survey attributed this unenviable performance to inflation, which is quite the highest in Latin America, hitting an official 30.9% last year, after 22.5% in 2007 and 17.1% in 2006.

Also fuelling the cost of living is the system of foreign exchanges controls that have been in force since early February 2003. Economists say the controls aren’t working, because they’re widely evaded and this pushes up the cost of imported goods, which must be paid for in dollars obtained at the black market rate of 6.5 bolivares to the dollar, rather than the government's official rate of 2.15 bolivares to the dollar.

Neither are the government’s price controls, for all the official raids and closure orders against businesses found to be selling food and other household essentials at prices above the official levels set by the government.

So you thinking you’d better go on the wagon to cut the booze bill out of the family budget? Think again: the cost of even NON-alcoholic beverages has jumped by an average 23.9% during the last six months alone, according to a report in the newspaper, El Universal, on Thursday.

The average includes a 37.5% leap in the price of a two-liter bottle of fizzy drink. Oh well, what about a nice English cup of tea? Up 33.5%, old bean.

Unsurprisingly, people, not least among them housewives trying to help out, are looking for extra work to ease the ever-higher burden of keeping body and soul together.

But the economic slowdown has also hit the jobs market. This, it says, applies above all to members of the older generation hoping to find part-time work to help eke out their meager state pensions.

Caracas still lags behind the notoriously costly cities of Tokyo, Osaka, Moscow, Geneva, Hong Kong, Zurich, Copenhague, New York, Beijing and Singapore. Of course, earnings in these cities are much higher than in Venezuela.

Caracas went against the general trend across Latin America, where Sao Paolo and Rio de Janeiro in Brazil both slipped down the world list from 25th to 72nd and from 31st to 73rd, respectively.

Bogotá, the capital of Colombia, where President Alvaro Uribe has pursued free market economic policies, also became more expensive, rising from 120th to 87th place in the world. Countries with free ranging currencies such as Mexico and its peso saw their cost of living fall in line with exchange rates, the survey found.