Venezuelans have struggled with hyperinflation for years. In autumn 2021, the local government decided to solve this by changing the nominal value of the domestic currency, the bolivar, by removing six zeros from the banknotes, for the second time in three years. However, it did not solve the economic problems of the country and the majority of its inhabitants. The covid-19 pandemic and subsequently the war in Ukraine, which caused a worldwide cost of living crisis, made their problems even worse.
Problems with both food and medicine
The resumption of steep price growth is eating into the incomes of Venezuelans, even the relatively privileged ones with access to US dollars. As a result, people in the South American country suffer from hunger and have problems buying food and medicine.
“Neither dollars nor bolivars are enough anymore. I can’t afford anything,” said 68-year-old Carmen Mendoz, who has a “variegated patchwork of income” in different currencies, from a pension to income from rental property to roughly $150 (141 euros) a month sent to her by her two daughters from Spain.
Consequences of hyperinflation
Hunger is a familiar specter in Venezuela, which suffered years of hyperinflation in the second half of the last decade. Many Venezuelans had to rummage through garbage to find food. Millions of people have therefore fled the country.
At the end of 2022, the growth of consumer prices in Venezuela began to accelerate sharply again. Last December, prices jumped by more than 37 percent from the previous month, according to a non-governmental group of economists who estimate the inflation rate in 2022 to be more than 300 percent.
Life in poverty
Monthly salaries in the private sector average $139, and average salaries in the public sector are said to be only about $14 a month, while the average family’s grocery shopping costs about $370 a month.
Even Venezuelans who have benefited from dollars through remittances or wage payments have been hit by price increases, while those who earn in bolivars have seen their modest earnings fall further.
Markets are full of food that few can afford, forcing people to skip meals or rely on aid from charities.
According to a survey conducted by the Universidad Católica Andrés Bello, around 50 percent of Venezuelan households live in poverty, and 41 percent of respondents said they skip one meal a day.
Don’t overlook
The decline in inflation is slower than expected, driven by household consumption