Thursday, July 24, 2008

Inflation in Venezuela

You may or may not know that Venezuela has a very high inflation rate (31.4% according to this site). Predictably, many people (such as those charmers at Small Dead Animals) blame Hugo Chavez and socialism for this state of affairs; on the other hand when I first heard about this I immediately found myself wondering if the CIA was printing up counterfeit Venezuelan banknotes and dumping them into the local economy to destabilize things. However, the truth is actually much more mundane than either the right wing fucks or my own tinfoil-capped head had thought, as this New York Times story from 1989 illustrates:
Inflation in Venezuela will rise by 65 percent to 70 percent this year, almost double last year's increase in the cost of living, the Planning Minister, Miguel Rodriguez, said today. The rate for 1989 so far, 52.7 percent, may slow down in the second half of the year as the Government's austerity program takes effect, Mr. Rodriguez added. Venezuela, which had one of Latin America's lowest inflation rates for many years, saw its cost of living rise by 35.5 percent last year after increasing 40.3 percent in 1987.
Thanks to Robert at My Blahg for the link. So really, the Chavez administration is actually doing a better job of managing inflation than the old regime. Not that the right wingers are going to acknowledge this, of course.

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