As Venezuelan President Nicolas Maduro seeks reelection this Sunday, his administration has managed to significantly reduce the country’s inflation from previously astronomical levels. However, many workers are feeling little relief as their wages continue to lag behind the high costs of living.
After years of hyperinflation that saw annual rates soar to 130,000%, Venezuela’s inflation has moderated to approximately 50% over the past year. Government measures, including credit restrictions, a stabilized exchange rate, and reduced public spending, have contributed to this decline. For the first time since 2012, monthly inflation figures showed a minimal 1% increase in June.
Despite these improvements, everyday Venezuelans are still struggling. Public sector workers, such as retired employee Oscar Reyes, report stagnant salaries that fail to keep pace with rising prices. “With the election, buying power hasn’t changed at all. Prices go up,” Reyes lamented. His monthly pension of $100 barely covers essential expenses.
In central Valencia, Carmen Morales, a 52-year-old administrator, has seen her weekly food bill double over recent months, exacerbating her financial strain. Morales, who earns $250 a month and supports her parents, has expressed frustration with the current administration and plans to vote for opposition candidate Edmundo Gonzalez. Gonzalez has promised to negotiate better salary deals and continue anti-inflation efforts if elected.
Economists point out that while inflation rates have decreased, the benefits are not always felt by consumers. “Even if inflation were to drop to zero, if you earn $200 and need $500 for food, the gap remains,” noted Asdrubal Oliveros, director of Ecoanalitica.
The government’s approach has included injecting significant funds into the economy to maintain a steady exchange rate of 36.5 bolivars per dollar. However, analysts warn that this may necessitate future adjustments. Additionally, restrictions on bank credit have forced local producers into challenging forward-selling arrangements, while business owners have called for more favorable fiscal policies to boost production and wages.
As election day approaches, the economic outlook remains mixed, with many voters pinning their hopes on change.
