The traces of hyperinflation continue to tread on Venezuelans

Venezuela came out of the hyperinflationary cycle after four years, news that the illegitimate Chavista regime of Nicholas Maduro and his followers celebrate together with the new businesses that proliferate throughout the country, but that citizens do not perceive in market prices or in their devalued salaries.

As much or more than in previous years, citizens continue to suffer from indiscriminate price increases, because, although 7.6% inflation was registered in December, accumulating 12 continuous months below 50%, “hyperinflation leaves traces”.

This is explained by the economist Ronald Balza Guanipa, dean of the Faculty of Economic and Social Sciences of the Andrés Bello Catholic University (UCAB), who agrees that the December figure put an end to the hyperinflationary cycle.

His basis for reaching this conclusion is the most accepted definition, established by the American Philip Cagan in 1956, which says that 12 months with price increases of less than 50% are necessary to consider hyperinflation overcome.

“It doesn’t mean that we get out of the problem, there are many who will never get out because they are no longer with us. So, it is good not to simplify, much of what was destroyed along the way is unrecoverable”, Balza highlighted.

not enough

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 its data from Venezuela.

The figures are echoed in the clamor of citizens who assure that in the country “there is not enough” money, because the prices are “exorbitant” and “everything is fully dollarized.” Salaries are received in bolívares, the impoverished local currency, but almost everything is paid in dollars, as Orlando Bolaños, a worker from Caracas, points out.

“The central government that deals with the needs of the people, that we are having a hard time. You see people still in the garbage dumps collecting food because their wages are not enough to buy food. Look around the town because people don’t live on a bond. Pay me a good salary and I’ll see what I do with my money”, questioned this worker.

Thus, the Venezuelan simplifies what the economist Balza explains, remembering that it is not possible to “ignore the period of destruction that occurred previously”, since the improvement that is estimated for the country after leaving the cycle will not be palpable for everyone.

“There are those who are not going to be able to see it (the improvement) because on the way they left the country, died, stopped studying, their illnesses worsened or because they could not face the problems,” says Balza.

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 he earned me ten dollars. With ten dollars I only buy three little things. Everything is expensive. Imagine, a chicken costs US$7, you earn US$10 and you buy sugar for US$1.50 right now we are gringos, not Venezuelans,” Garcia said.

mirage

Last Saturday, January 15, in his annual accountability before Parliament, a confident Maduro celebrated the end of hyperinflation.

“This makes us optimistic that we have overcome the burdens of hyperinflation and in power, with a lot of discipline, work, effort, with a lot of intelligence, audacity and wisdom, in 2022 we will embark on a path to flatten and defeat high inflation”, commented.

But his security dissipates in the statements of the economist Balza, who recalled that both the data offered by Maduro, and the economic growth reflected in the opening of new businesses in the main cities of the country, are not proof of improvement.

“Setting as an example what we can all see in an advertisement or on a social network, or through a news channel and not seeing everything that is missing around it is disrespectful to Venezuelans who are in the midst of the crisis,” he said. the dean.

Among these examples are merchants like Yoel Martínez, owner of a food business in the Caracas favela of Petare, the largest in Venezuela, who has felt strongly the years of hyperinflation and has barely managed to stay afloat.

“It was very difficult, I saw them very difficult. I was on the verge of bankruptcy many times, the business dropped the category a lot”, said this trader who will continue trying to survive with or without hyperinflation.