Prices in Dollars Rose Almost 54% in Venezuela During 2022 – In Venezuela, prices of goods and services have increased even when denominated in dollars, indicating that inflation has accelerated. Asdrubal Oliveros, an economist and partner at the market research firm Ecoanalitica, stated that dollar-denominated prices rose close to 54% during 2022, being affected by the inflation that is currently hitting the country. Among the most affected items are food and beverages, which registered a price increase of 66.7%.
Similarly, prices in the restaurant and lodging sector, which is tied to national and international tourism, increased by 95%, making this the sector with the greatest increase. With prices denominated in the national fiat currency, inflation rates are considerably more severe, with food and beverage costs increasing by 150 percent over the same time period.
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The country has recently emerged from a period of hyperinflation that began in 2017 and ended in January 2022, when it recorded 12 consecutive months with inflation rates below 50%. While most stores still take bolivars, the local currency, as payment, prices have been labelled in dollars for some time in order to ease the management of stocks and prices.
Since the government proposed and implemented a tax on its use in March, dollar payments have decreased, although the U.S. dollar is still widely used as a unit of account. This price increase, which has been denominated popularly as “inflation in dollars,” is now affecting the savings of many Venezuelans who, like Argentines, have taken refuge in foreign currency and in dollar-pegged stablecoins as a hedge against inflation.
During the last two months of 2022, the bolivar experienced a downward spiral, dropping to historic lows and increasing the desire for other, more stable currencies. The company anticipates this tendency to continue, with costs also increasing substantially in 2023. This could alter depending on the Venezuelan government’s willingness to undertake a more official dollarization procedure.
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