The hyperinflationary cycle in Venezuela seems to be running out after four intense years of destruction in the productive apparatus, something that should be a reason to rejoice, but citizens continue to receive their devalued salaries and are prevented from buying basic products due to the monetary policies of socialist Nicolás Maduro.
In spite of the regime’s attempts to “celebrate” the breaking of the hyperinflationary cycle, citizens continue to suffer indiscriminate price increases, since, although in December inflation reached 7.6%, accumulating 12 continuous months below 50%, “hyperinflation leaves traces.”
This is explained by economist Ronald Balza Guanipa, dean of the School of Economic and Social Sciences of the Universidad Católica Andrés Bello (UCAB), who agrees that December’s figure put an end to the hyperinflationary cycle.
His basis for reaching that conclusion is the most accepted definition, established by Philip Cagan in 1956, which states that 12 months with price increases of less than 50% are necessary to consider hyperinflation overcome. “It does not mean that we are out of the problem, there are many who will never get out of it because they are no longer among us. So, it is good not to simplify, (…) much of what was destroyed along the way is irrecoverable,” highlighted Balza in an interview to EFE agency.
The Central Bank of Venezuela (BCV) shows that inflation was 686.4% in 2021, which maintains the country as the nation with the highest figure in the world. In Latin America, Argentina appears in second position (50.9%) and Brazil in third (10.2%), far behind Venezuela.
The figures are echoed in the clamor of the citizens who assure that in the country “money is not enough”, since prices are “exorbitant” and “everything is totally dollarized”. Salaries are paid in bolivars, the impoverished local currency, but almost everything is paid in dollars, as underlined by the Caracas worker Orlando Bolaños. “The central government should take care of the needs of the people, we are having to work. You see people still in the garbage dumps picking up food because their salaries are not enough to buy food (…) Look after the people because people do not live on a bonus. Pay me a good salary and I will see what I do with my money,” said this worker.
Thus, the Venezuelan simplifies what economist Balza explains, remembering that it is not possible to “overlook the period of destruction that occurred previously,” since the improvement estimated for the country after coming out of the cycle will not be palpable for everyone.
“There are those who will not be able to see it (the improvement) because along the way they left the country, died, stopped studying, their illnesses worsened or because they were unable to face the problems,” Balza assures.
This is the case of Estelina García, a domestic worker who earns 10 dollars for each house she cleans and whose salary is enough to buy chicken, sugar and some potatoes or rice. “I work cleaning and I earn ten dollars. With ten dollars I buy only three little things. Everything is expensive (…) Imagine, a chicken costs 7 dollars, you earn 10 dollars and you buy sugar with 1 and a half dollars,” said García.