Prices in Dollars Rose Almost 54% in Venezuela During 2022 – Emerging Markets Bitcoin News
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Prices in Venezuela have risen steadily, even if they are in foreign currency. According to data collected by market research firm Ecoanalytica, dollar-denominated prices have risen nearly 54% through 2022, affecting the incomes and savings of Venezuelans who used the US dollar as an inflation hedge.
Prices are increasing even in dollars in Venezuela
Inflation has risen in Venezuela, and the prices of products and services have been increased even in dollar terms. Asdrubal Oliveros, economist and partner at Ecoanalitica, a market research firm, stated that dollar-denominated prices rose by almost 54% in 2022 due to the inflation currently hitting the country.
The most affected products are food and beverages, whose prices rose by 66.7%. Similarly, prices in the restaurant and accommodation sector related to domestic and international tourism rose by 95 percent, making this industry the biggest jump.
Inflation rates are even worse when prices are in the national fiat currency, with food and beverage prices rising 150 percent over the same period.
The country recently emerged from a period of hyperinflation that began in 2017 and ended in January 2022, when the country registered 12 months with monthly inflation below 50%.
Informal dollar process
Most shops still accept bolivars, the local currency, as payment, but some time ago prices were marked in dollars to simplify inventory and price management. Dollar payments have been on the decline since the government proposed and approved a tax on its use in March, but the US dollar is still widely used as a unit of account.
This price hike, commonly referred to as “dollar inflation,” is now affecting the savings of many Venezuelans who, like Argentines, have taken refuge in foreign currencies and dollar-pegged stablecoins to hedge against inflation. The Bolivar faced a downward spiral in the last two months of 2022, sinking to historic lows and fueling demand for other, more stable currencies.
The company expects this trend to continue, with prices also rising significantly in 2023. However, this could change depending on the openness of the Venezuelan government to adopt a more official dollar process.
What do you think about dollar prices increasing by more than 50% during 2022 in Venezuela? Let us know in the comments section below.
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