Venezuelans exit hyperinflation but see few reasons to celebrate

by Jennifer Ann Thomas | Thomson Reuters Foundation
Monday, 1 August 2022 08:00 GMT

Handwritten signs show current prices of cups of coffee and single cigarettes on sale in downtown Caracass, Venezuela January 9, 2018. REUTERS/Marco Bello

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The inflation diaries: Even as sky-high inflation cools, basic food is still far out of reach for most Venezuelans

By Jennifer Ann Thomas

Aug 1 (Thomson Reuters Foundation) - During four painful years of hyperinflation in Venezuela, Lucina Moreno had to be creative to provide for herself and her young daughter - switching jobs, raising pigs and selling homemade cheese. But even that was not enough.

Like many Venezuelans, 30-year-old Moreno relies heavily on remittances sent home by some of the roughly six million Venezuelans who have fled the country during the past decade to escape economic misery.

Read more: The Inflation Diaries series

Moreno, whose brother and the father of her daughter send her money from Chile, said her greatest wish was for her five-year-old child to have a proper education.

"What every parent wants is to give their children the tools they need to face life independently. In Venezuela, I don't have that," Moreno said by phone from her home in the western state of Merida.

At the start of 2022, Venezuela finally exited a four-year bout of hyperinflation - commonly defined by economists as monthly inflation of more than 50%. In 2018, inflation reached 65,000%, according to the BTI Transformation Index, which determines how close countries are to democracy and adopting a market economy.

But while inflation cooled to its lowest level in a decade earlier this year, consumer prices still rose more than 170% in the 12 months ending in June, according to the Venezuelan Finance Observatory (OVF), a non-governmental economic research institution.

Many families are still struggling to afford food.

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Moreno said she needed between $300 and $350 to buy a two-week supply of basic food for herself, her father and her daughter.

She makes no more than $20 from her monthly sales of pigs and cheese in addition to help from her brother and the father of her daughter.

People around the world are seeing food and energy prices spike due to the Ukraine war and fallout from the COVID-19 pandemic, but the causes of Venezuela's inflationary ills long predate the global cost-of-living crisis.

"Venezuela was already in trouble," said Luis Daniel Alvarez, director of the School of International Studies at the Central University of Venezuela.

"Venezuela's reality is very particular and marked by a severe social crisis in the country. Because of internal turbulence, we have had an unstable situation for many years," he added.

Like Moreno, retired schoolteacher Maria Teresa Clemente, 64, had to start doing side jobs, such as sewing and hairdressing, to pay the bills.

"We pay for services, but they don't work. Power goes out often," said Clemente from her home in the capital, Caracas, where she said people were increasingly abandoning their cars in the street because they could not afford to run them.

"Most Venezuelans can't afford a funeral to bury a family member. What we do today is ask for donations from our communities to help pay for funerals," she said.

But despite persistent economic pain, some Venezuelans said they were starting to feel signs of improvement.

Olga Lorenzi, 36, sold her kitchen appliances, including her fridge, at the beginning of the pandemic.

"It was just a precaution. We didn't know what was ahead and we needed the money to survive," said Lorenzi, who works as the manager of a cellphone shop that sells accessories and undertakes repairs.

"Now I'm starting to buy my stuff again. It might not be new, but I'll manage to buy used appliances to equip the kitchen," she said.

Explore our interactive map below for more stories about the human impact of the cost of living crisis in our three-part series on The Inflation Diaries

More from Part Three of The Inflation Diaries series:

In France, families turn to charity food boxes as inflation bites

Mexico's informal workers hit hard as high prices fuel poverty

Soaring energy and rent prices leave Australians with little left

Lebanese struggle to put food on the table as inflation tops 200%

In Germany, many struggle as Russian gas squeeze drives up prices

(Reporting by Jennifer Ann Thomas in Sao Paulo; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

Our Standards: The Thomson Reuters Trust Principles.

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