The president of the National Council of Commerce and Services (Consecomercio), Gustavo Valeillos, indicated that the organization predicts 40 % inflation in Venezuela by the end of this year.

Valecillos stressed “the commitment of the business sector” in terms of its contribution in terms of “public policies that stimulate productivity to ensure that Venezuelans can cover their needs.”

According to Consecomercio estimates, the country could close 2024 with 60% inflation, unlike last year when hyperinflation was experienced and the closing was at 190 %.

For his part, José Gregorio Rodríguez, regional coordinator of Consecomercio, stated: “It is our responsibility to contribute to proposing public policies that stimulate productivity with the objective of ensuring that Venezuelans have a welfare state that allows them to cover their needs.”

The first vice president of Fedecámaras, Felipe Capozzolo, referred to the importance of cooperation between the public and private sectors and added that in order to strengthen the presence of more products, more companies and more entrepreneurs in the market, in addition to the need to “control the exchange rate differential in order to increase productivity.”

M.Pino

Source: talcualdigital

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La entrada Consecomercio predicts closing the year with 40 % inflation apareció primero en Bitfinance.

Venezuela registered an accumulated inflation of 4.1 % in the first quarter of the year, after adding 1.2 % in March, the same as in February and 1.7 % in January, reported the Central Bank (BCV).

The 1.2 % rate is the lowest the nation has recorded since August 2012, when goods and services became more expensive by an average of 1.1 %, according to official information.

The BCV indicated that the sector that registered the greatest increase in prices last March was health, with an average increase of 1.6 %, followed by food and non-alcoholic beverages, clothing and footwear and “miscellaneous goods and services”, with increases of 1.3 %.

Between 2017 and 2021, Venezuela experienced hyperinflation with monthly increases of up to three digits, the highest of 196.6 % in January 2019, which rapidly reduced the purchasing power of workers and the value of the bolivar, the currency national, which led the country to unofficially adopt the US dollar as a way to protect itself against this crisis.

Currently, even the price of gasoline is set in dollars, at 50 cents per liter.

The government expects Venezuela to close 2024 with the lowest inflation in the last decade, as reported last March by President Nicolás Maduro, who assured he had a plan to continue slowing the pace of price growth.

Meanwhile, university professors and workers from various sectors demand that the authorities increase the minimum wage, the reference for other salaries in the public sector, which is equivalent to about $3.5 per month.

With information from El Sumario

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Argentina closed the year 2023 with year-on-year inflation of 211.4%, the highest figure since the period of hyperinflation in 1989-1990. This figure emerges from the first measurement carried out during the government of Javier Milei, who began his term with a ‘shock’ plan that included a 50% devaluation of the peso.

The National Institute of Statistics and Censuses (Indec) reported that, in December, the consumer price index rose by 25.5% compared to November, marking a significant acceleration compared to the previous month. This increase is linked to the ‘sincerization’ of prices following the Alberto Fernández administration, where Sergio Massa, Minister of Economy and opponent of Milei in the elections, implemented a policy of ‘fair prices’.

Following the announcement of the first economic measures of the Milei government in December, the Central Bank said that price liberalization was essential to correct fiscal and external imbalances. In December, increases were noted in several sectors, with goods and services rising by 32.7%, health by 32.6%, and transportation by 31.7%.

The food and non-alcoholic beverages sector saw an increase of 29.7%, with essential products such as wheat flour, rice and sunflower oil rising by more than 50%. This situation raises concerns about its impact on the basic basket and the poverty rate, which in Argentina is around 45%.

President Milei, who took office on December 10, anticipated monthly inflation rates of between 20% and 40% between that month and February. However, he assured that his fiscal ‘shock’ plan would avoid an annual hyperinflation of 15,000%. Milei also stressed in an interview that a monthly figure close to 25% would be a significant success.

The president aims to achieve fiscal balance by 2024, putting an end to the monetary issue that has so far been used to finance the deficit. In addition, Milei acknowledged the possibility of closing the Central Bank in the future, as part of its strategy to control inflation over a period of 18 to 24 months.

K. Tovar

Source: Bancaynegocios

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La entrada Argentina closed 2023 with inflation of 211.4% apareció primero en Bitfinance.

In a drastic economic turnaround, last Tuesday, the government headed by Javier Milei devalued the national currency by more than 50 %, setting the official exchange rate at 800 pesos to the dollar, compared to 391 at the close of the previous Thursday. The measure was announced by the Minister of Economy, Luis Caputo, who warned of the imminent risk of hyperinflation in Argentina.

Minister Caputo highlighted the root of the country’s economic problems, noting that the crisis has always been fiscal in nature. In an effort to address this problem, he announced austerity measures, including cuts in energy and transport subsidies. “The genesis of our problems has always been fiscal. The country must overcome its addiction to the deficit in public finances,” Caputo emphasized during his statement.

In his previously recorded speech, Caputo explained that the official exchange rate is raised to 800 pesos to provide appropriate incentives to the productive sectors and encourage the increase of production.

Despite the devaluation, the government will maintain, at least for now, the currency control system implemented since 2019, which includes a dozen different exchange rates.

Javier Milei, a 53-year-old economist who during the election campaign symbolized his commitment to reducing public spending by brandishing a chainsaw, took office last Sunday. He emphasized the need for a “shock” treatment to overcome the crisis, ruling out any gradual approach. The trustee aims to make a fiscal adjustment equivalent to 5% of the Gross Domestic Product.

“Today, the State artificially maintains extremely low prices in energy and transport tariffs through these subsidies,” declared the Minister, referring to public spending aimed at keeping prices low in various consumer sectors.

K. Tovar

Source: Descifrado

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Venezuelan citizens currently use dollars, euros, Colombian pesos for their transactions. Cryptocurrencies also have an important use in the market to cancel products and services as a result of the loss of value and confidence of the bolivar and the hyperinflation registered since 2017 in the country.

According to the economist Aarón Olmos, “in a situation of hyperinflation, lack of confidence in the monetary sign and shortage of bills, crypto assets found a place to take root”, to the point that the country has become the leader in the region in the adoption of digital currencies.

Olmos, who is a specialist in cryptocurrencies, explained that since the beginning of hyperinflation, the use of cryptocurrencies has increased. “Given the harsh economic situation, crypto assets, which are used as an alternative to money, began to attract Venezuelan citizens.”

Cryptocurrency advertisements can be seen at different bus stops, vehicles, facades of various establishments, light poles.

Venezuela leads cryptocurrency adoption

Cryptocurrencies have become the “anchor” of many Venezuelans to protect their resources in the face of the impossibility of saving in bolivars. As of 2018, when the national executive allowed the use of foreign currency, companies with P2P platforms and exchange houses arrived and the businesses started accepting cryptocurrencies.

According to the historical data of LocalBitcoins, the year 2019 became the year with the most operations in a year with an exchange of “303 million dollars, when in 2013 1,248 dollars were negotiated.”

In 2020, Venezuela led the Global Cryptocurrency Adoption Index to perform Chainalysis, as well as the third and seventh place of the 154 countries in 2020 and 2021, respectively.

Crypto mining in Venezuela

Olmos explained that in 2018 the Venezuelan government founded the Superintendency of Cryptoactives (Sunacrip) and the Treasury of Cryptoactives of Venezuela S.A. Then, in 2020 the country had orders, resolutions and regulations, issued by the Central Bank of Venezuela (BCV) and Sunacrip, to regulate the activity of digital mining, among other things.

In 2021 the company dedicated to the sale of equipment and mining Criptoávila began its operations and provided Venezuelan crypto miners with a base to expand activity in the country. According to Gilbert Monasterios, general manager of the company, “since that date there is an increase in the number of clients and in the credibility of this activity.”

Due to the crisis in the electrical system and the poor quality of the internet, considered the slowest in the world, Venezuelan miners face great risks when carrying out their activities because, according to Olmos, it could occur “an electricity interruption while a group is mining so the equipment get offline and some may even be damaged.”

On the other hand, the Criptoávila company plans to install ATMs to exchange currencies for cryptocurrencies, which would be a great advance for Venezuelan cryptomonetization.

M. Rodríguez

Source: bancaynegocios.com

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The Venezuelan economy in 2021 was characterized by a series of restrictions imposed by the government due to the pandemic. However, for 2022 great challenges are assigned to achieve economic growth in the country.

The main economic challenges for Venezuela for 2022 are:

• Tame inflation

Since 2017, Venezuela has registered the highest hyperinflation in the world, but last year and for 11 continuous months it achieved figures below 50%, placing the country one month away from overcoming hyperinflation. The great challenge of 2022 is to reduce these monthly percentages, but above all to ensure that the prices of products and services do not increase again.

According to the figures issued by the Central Bank of Venezuela, accumulated inflation closed at 631.1%, while the interannual was 1,197.5%. The national government must deal with these figures, which aspires that 2022 will become the year of economic recovery.

• Increase Tourism

Achieving a diversified economy is one of the goals set by the national government, which plans for 2022 to focus its attention on the tourism industry, which is why it is currently developing projects to attract investment and reactivate the tourism sector in the country.

The President of the Republic, Nicolás Maduro, believes that tourism should become the driving force behind the economy, replacing the oil industry. However, this is one of the biggest challenges of the country because this fact also implies overcoming the economic crisis and recovering basic services such as electricity, water, among others throughout the national territory in order to turn the country into a tourist power .

• Revive the national currency

Within the framework of a de facto dollarization, installed as an equilibrium measure for a non-existent price of the bolivar. The biggest challenge for the national government is to recover the value of the bolivar and convert it back into the national reference currency.

The national executive promised, within the framework of the third national conversion that occurred last October, to promote the national currency now called the digital bolívar

• Rescue sports spaces

Venezuela achieved one gold and three silver medals at the Tokyo 2020 Olympic Games, for which the President of the Republic announced the launch of the “Olympic route plan” that will aim to strengthen sports areas for the training of athletes from the country. The challenge of this mission is to recover abandoned spaces and build new buildings, which implies a large financial investment in the infrastructure area.

M. Rodríguez

With information from specialized media in economics

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Jack Dorsey, CEO and one of the founders of the social network Twitter, assured that hyperinflation is an economic phenomenon that will soon spread to much of the world.

“Hyperinflation is going to change everything. It is happening”, assured the CEO through his official account, adding that this“ will happen soon in the United States.”

In September, inflation increased by 5.4 % in the US, compared to the previous year, due to a growth in consumer prices, this being the largest increase since 2008.

For his part, the chairman of the US Federal Reserve, Jerome Powell, stressed that “it is likely” that inflation pressure will last longer than previously expected and may continue next year.

Dorsey also spoke about cryptocurrencies, indicating that they will have a great influence on world economies, and that it will also generate an important change in how things are carried out in general.

K. Tovar

Source: Descfirado

La entrada Dorsey: “Hyperinflation will hit the whole world” apareció primero en Bitfinance.

The third monetary reconversion is imminent, but that strategy will not make citizens prefer the bolivar. This was stated by the economist and former deputy José Guerra, who also indicated the need to create a new currency.

According to the expert, the new currency should be anchored to the dollar, while the economy recovers and subsequently it is necessary to progress to “a floating system on solid fundamentals.”

As a consequence of the damage caused by the economic policies, especially between 2007 and 2020, the former deputy considers that it is impossible to restore the bolivar. He affirmed that, in financially unstable countries, the issuance of local currency must be supported by international reserves so that the public chooses to maintain it and that does not happen in Venezuela.

According to the economist, it is imperative to defeat hyperinflation. This requires the design and application of an extensive program of economic and institutional reforms with external financing, in order to prevent the Central Bank of Venezuela (BCV) from continuing to increase the fiscal deficit.

“The most expeditious recipe for destroying a currency is for the central bank to use its issuing capacity to finance the treasury, a populism tool known as the inorganic issuance of money and it is the strategy most used by all countries that have suffered from hyperinflation”, Guerra concluded.

M. Rodríguez

With information from national media

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