Rising food prices are causing people in Venezuela to reduce spending on food or buy alternate, cheaper foods.
The country has an inflation rate of nearly 23%, and food prices are rising faster than salaries. Although some people in Venezuela are shopping at subsidized shopping markets that are run by the state, they have to deal frustrating long lines.
The poorest population in Venezuela are spending about 45% of their income to eat.
Politically, President Hugo Chavez has attempted to mitigate the issue by mandated price controls and creating meal programs in neighborhoods. The socialist government has also attempted to import food products and reduced rates and sell them through state-controlled grocery stores.
The minimum wage in Venezuela has risen, but the increase did little to eliminate the situation. In 2010 the median salary rose by 22%, but inflation was set at 27%. The nation's population has seen a 14.5% decline in their buying power over the past four years.
Atypical Food Prices
Food prices in Venezuela are atypical for those in other areas in Latin America: although prices for other areas in Latin America grew by 7%, those in Venezuela grew by 33% in the last year, ending in March, according to the United Nation's Food and Agriculture Organization.
Some people say that overspending is to blame for Venezuela's high food prices. Although there is more money available in Venezuela's economy, food production cannot keep up with the supply.
Currency value in Venezuela has risen by 160% when adjusted for inflation, according to the InterAmerican Security Watch. Compared to December 1998, the money supply in 2010 was 29 times larger.
Experts believe that economic growth devalued currency and that controls on currency are also to blame for the high food costs.
Key Statistics – Venezuela's Economy (source: CIA World Factbook)
- Venezuela's GDP (purchasing power parity) was $345 billion in 2010, compared to $351 billion in 2009; the country ranks 35th compared to the world.
- The public debt in 2010 was 25% of GDP in 2010 compared to 18% of GDP in 2009.
- The inflation rate for Venezuela was 29% in 2010 compared to 27% in 2009.
- The top five leading industries in Venezuela are petroleum, construction materials, food processing, textiles, and iron ore mining.