Reuters logo
UPDATE 1-Venezuela 2015 inflation may hit 80 pct, Maduro says
October 15, 2015 / 11:54 PM / 2 years ago

UPDATE 1-Venezuela 2015 inflation may hit 80 pct, Maduro says

(Adds details on minimum wage, quote by Maduro, context)

CARACAS, Oct 15 (Reuters) - Venezuela’s inflation rate could reach 80 percent in 2015, President Nicolas Maduro said on Thursday, this year’s first official consumer price data for the OPEC nation, which is struggling with recession amid low oil prices.

Maduro in a televised broadcast announced a minimum wage increase of 30 percent as of Nov. 1, which he said that combined with previous minimum wage hikes, would yield a total increase of 137 percent from the start of the year.

This is “much greater than what the central bank and the National Statistics Institute inform me will be the induced, speculative, criminal inflation of 2015,” said Maduro, who blames business leaders and the opposition for rising prices.

“It could be near 80 percent, around 80 percent, they tell me, those are the projections.”

Wall Street analysts widely believe that Venezuela’s 12-month inflation has already reached triple digits due to a steady expansion of the money supply and a creaking state-led economic model that has struggled to keep consumer goods on shelves.

One opposition newspaper, citing an unidentified central bank source, this month reported inflation had reached 179.5 percent.

Inflation in 2014 was 68.5 percent.

Venezuela this month said in a filing to the U.S. Securities and Exchange Commission that its gross domestic product contracted by 4.0 percent in 2014. Some economists said the filing referred only to the first three quarters of the year.

Maduro said the minimum wage would rise to 9,649 bolivars plus employer-issued meal tickets of 6,750 bolivars, for a total of 16,399 bolivars. Based on the official exchange rate of 6.3 bolivars, the total is equivalent to $2,603. But on the black market, the amount is worth only $23.

Silence about basic economic indicators has boosted investor concerns about a potential default on foreign debt. Venezuela’s bonds are by far the highest yielding in emerging markets.

Government officials dismiss default talk as a right-wing smear campaign.

The ruling Socialist Party says the country is victim of an “economic war” led by business leaders and opposition politicians. Critics say rigid currency controls and price controls on consumer goods have created product shortages and restricted local industry’s productive capacity. (Reporting by Brian Ellsworth; Editing by Leslie Adler)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below