Annualized inflation as of end-April was running at 30.4%, but former Central Bank economist Jose Guerra forecasts that full-year inflation will top 35%, albeit this seems a bit conservative.
The bank adds that inflation for the poorest segment of the population was 8.4% in April, the highest one-month rise since January 2008 when inflation affecting the poorest Venezuelans increased 4%.
The cumulative four-month price inflation affecting the poorest Venezuelans was 14.8% through 30 April.
The poorest Venezuelans spend 47% of their monthly income on food.
Food prices jumped 11.1% in April. Part of the increase was the government’s decision to raise prices by up to 20% on five basic staples – chicken, rice, sugar, milk and cheese.
Price controls also were lifted on margarine, ketchup and mayonnaise, which are important ingredients in the average Venezuelan diet.
The swap market Bolivar also breached the BsF 8 per dollar floor. It’s possible that inflation in May could be the same or higher than April’s price rise.
Inflation and devaluation are political killers, especially for incumbent regimes.
But President Hugo Chavez says it isn’t his fault that Venezuela’s inflation is the highest in the region and its currency the weakest.
Chavez blames a speculative political conspiracy orchestrated by the traditional bourgeoisie. But he will set things straight.
“Send me a list of the speculators,” Chavez said on 9 May.
Are more butchers to be arrested? Or does Chavez plan to go after the nameless bourgeois conspirators?
Vice-President Elias Jaua says that “…those who control the strategic means of production and distribution… are responsible for speculation (which is)… responsible for inflation…and the battle is for socialism.”
Translation: All food producers and distributors could be targeted for expropriation, but the regime will go after the biggest groups first: “…those who control the strategic means of production and distribution…”
Conclusion: Large diversified food and beverage groups like Polar and Alfonzo Rivas & Cia top the regime’s list of coming expropriations in 2010 – likely before September’s legislative elections.
However, based on the regime’s track record, the private owners won’t be compensated, and all of the production and distribution services they provide the country very efficiently will collapse within less than a year after they are expropriated.
The crises just keep piling up: 1) the highest inflation in Latin America, 2) the weakest currency in the region, 3) power outages are worsening as the generation/transmission grid fall apart, literally, 4) potable water supplies are shrinking, 5) food shortages are worsening… and this is just the thin crust on the growing chaos that is visible everywhere one looks in Venezuela.
It fosters a sense that something’s going to blow, probably sooner than later.