Violent inflationary outbreak in Venezuela: prices rose 37.2% in December and Maduro announces new controls

The Maduro regime announced emergency measures in the face of the violent escalation of prices and the failure of successive stabilization programs. Far from over, the Venezuelan inflationary process continues to erode economic activity.

The reconversion and economic stabilization program launched by Nicolás Maduro once again found failure, in the same way that the predecessor plans ended.

Venezuela’s monthly inflation rebounded violently and reached 37.2% only in the month of December.

Prices had already increased by 21.9% and up to 14.5% in October, according to statistics provided by the National Assembly (an independent body from the regime).

The Central Bank of Venezuela was intervened: it stopped publishing official statistics on inflation from November until prior notice.

Year-on-year inflation climbed to 305.7% in December 2022, which represents a strong increase compared to the 139% observed in the 12-month accumulated corresponding to July.

The stabilization plan failed, prices once again increased their rate of increase and the goal for the generation of their own stable currency was once again forgotten.

In response to the new failure, the socialist regime announced the return of price controls on more than 40 consumer products.

The Government insists that the measures are aimed at “fighting speculation and inflation” but the truth is that they only threaten to generate another violent episode of shortages.

If price controls were reintroduced, it is worth noting why they were (at least temporarily) removed in the first place.

The Maduro regime was forced to ease controls for the first time in August 2015 with the Law for the Partial Reform of the Organic Fair Prices, after registering a food shortage of more than 40% in all the gondolas in the country.

Later, shortages became widespread, reaching up to 80% of the goods offered on supermarket shelves since January 2016.

And with the outbreak of hyperinflation in mid-2017, price controls became impossible to manage.

Hyperinflation forced the Government to recognize mostly free prices given the impossibility of avoiding its sale in the informal market and the dramatic shortage in gondolas.

But after the hyperinflationary process was attenuated between March 2021 and July 2022, the regime recovered a certain margin of maneuver to establish controls.

The resurgence of monthly inflation above 30 points and the return of price controls are elements that together threaten to cause a shortage of supplies the like of which has not been seen since 2017.

The population would be forced to resort again. to informal markets to purchase basic goods such as staple food and toilet paper.

With information from La Derecha Diario

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