The “coup” of inflation in August left many Venezuelans on a “forced diet”

MARACAIBO VENEZUELA –

Luz María Pineda, a 54-year-old Venezuelan, has 10 children at home. Her husband, a security guard working day and night, earns 100 bolivars (about 12.5 dollars) a week, which is barely enough to feed them. Sometimes they fall short.

“The situation is difficult for everyone and, for those who have children, even more so,” says the Wayuu woman, as she walks holding the hand of one of her three-year-old children in a shopping center in Maracaibo, one of the main cities of the country. She never expected “the hit” in August, she says, when the currency devalued and inflation galloped again.

Venezuela registered in August the highest monthly inflation of the last 12 months, of 17.3%, according to the Venezuelan Observatory of Finance, of opposition tendency. The figure triples inflation in Colombia and doubles that of Mexico, Uruguay and Chile in all of 2021.

The South American country, governed by the socialist leader Nicolás Maduro, has accumulated a price increase of 153% in the last year, according to the aforementioned Observatory.

The food basket increased 21.66% compared to August 2021 and the minimum wage covers 4.3% of the cost of basic food for a family (about 371 dollars), indicated that agency. But in cities of the interior, like Maracaibo, the crisis is felt with particular accent: the food basket increased in August to 517 dollars, according to its Chamber of Commerce.

“Food is what worries me the most,” admits Luz María. Give your children chicha [bebida de maíz fermentado] and “arepitas” of flour to “sustain them”, he specifies. The kilo of rice that he usually buys from time to time went from costing 5 bolívares to 8.5 in just days. “How do I buy the ‘salado’, the meat, the cheese? What I can take with me sometimes is a tuna, a sardine”.

While food is a priority, she worries about the uniforms and supplies her children will need to wear in the upcoming school year. “You can’t even ask” prices, she says, standing in front of a store that offers “texts” for school, balloons, pastries and gifts.

The factor that triggered prices weeks ago was the 37% devaluation of the Venezuelan bolívar against the US dollar, explains the economist, deputy elected in 2015 and member of the Venezuelan Finance Observatory, José Guerra, today in exile.

This devaluation “passed through” to prices with a rise of just over 17%, he details. “In the following months, probably at a slower rate, this effect of the transfer of the August devaluation to prices will continue,” he assures the voice of america.

Venezuela came out of a hyperinflationary cycle of more than four years in a row just last February. Today, it is in a “phase of high inflation,” says Guerra.

His prediction is not optimistic. “That process will continue. This is going to persist. [Lo vivido en agosto] it dissolved the purchasing power of salaries and pensions in half”, he points out.

very expensive everything

Eby Torres, 66, who cleans houses two days a week for $20, exhales as she thinks about her family’s finances while waiting for a bus on Cecilio Acosta Street in Maracaibo, under a blistering sun. “Oh, mijo! Everything is very expensive,” she laments.

She is hypertensive and suffers from diabetes. She can barely scrape together the money to buy her medicine and, to top it off, she must soon pay for a medical examination for her hepatic daughter.

“If you get sick, there is nothing in the hospitals, you have to pay here, there. Most of the money goes on food,” he says, crumpling a wad of bolivars in his hand for his fare.

The Venezuelan Finance Observatory reported this week that food prices rose 15.6% last month. Those of items such as clothing and footwear, entertainment, alcoholic beverages or education rose above 22 points.

The Central Bank of Venezuela, related to Chavismo, revealed weeks ago that June’s inflation was 11.4% and July’s was 7.5%. In its latest report, it specified that the price increase in the first seven months of the year amounted to 48.4%, the highest in Latin America.

Salaries in Venezuela, still calculated in dollars, lost between March and August of this year exactly half of their purchasing power due to the decrease in that national currency that Eby is squeezing against his chest this noon, warns the economist Guerra.

wonder and pessimism

Roberto, a shoemaker, says he was “astonished” one of those last days of August when the prices of goods, products and services increased vertiginously due to the rise of the dollar in the parallel market. He was brought back from the supermarket without the usual purchase from him.

“It didn’t reach me,” he says. The price of a kilo of corn flour, for example, rose from 4.5 bolívares to just over 12 in five months, says Guillermo Suárez, a university worker.

He blames “the speculators” for these increases, but also criticizes the government of Nicolás Maduro for not showing “an iron will” to control these price increases.

The 71-year-old man says he is on “a forced diet” due to lack of money, and is about to retire. Even so, he predicts that the future of the country will go “well”, just like Johnny, a street vendor who walks dozens of blocks offering sweets and salty snacks.

“We are bad, but we are doing well,” he says, paraphrasing an iconic phrase by the late former minister and former presidential candidate Teodoro Petkoff, from the end of the last century.

“Here what you have to do is work, but people don’t want to work,” he says, shortly before walking away at a brisk pace, on his way to another busy avenue in the city. Eby, the domestic worried about the health of her daughter, boarded a red bus near her, minutes before.

As he signaled to the driver to stop, he tried to sum up the country with a phrase overloaded with pessimism: “Venezuela is forgotten, did you hear? In a lot of crisis.”

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