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Venezuela raises minimum wage by 40% as economic crisis deepens | Venezuela raises minimum wage by 40% as economic crisis deepens |
(about 1 hour later) | |
Venezuela is to raise its minimum wage by 40 per cent, a move which could worsen high levels of inflation in the crisis-stricken nation. | Venezuela is to raise its minimum wage by 40 per cent, a move which could worsen high levels of inflation in the crisis-stricken nation. |
President Nicolas Maduro said the new pay level would protect workers against what he called Washington’s “economic war” on socialism. | |
But most economists say his socialist government is in fact stoking a vicious cycle in a country already wrestling with the world’s fastest inflation. | |
The new minimum wage will come into force in January, President Maduro announced during a televised end-of-year speech, and follows six previous pay hikes in 2017. | The new minimum wage will come into force in January, President Maduro announced during a televised end-of-year speech, and follows six previous pay hikes in 2017. |
The move is intended to counter quickening inflation coupled with a depreciating bolivar, a situation that has plunged millions of people into poverty in the once-thriving oil-rich nation. | The move is intended to counter quickening inflation coupled with a depreciating bolivar, a situation that has plunged millions of people into poverty in the once-thriving oil-rich nation. |
Venezuelans will now earn at least 797,510 bolivars a month, factoring in food tickets – or just over $7 (£5.10) on the widely used black market index. Millions will still be unable to afford three meals a day or basic medicine, while the increase is likely to stoke inflation further. | |
Prices went up 1,369 per cent between January and November last year, according to figures released by the opposition-led Congress, which estimated the 2017 rate would top 2,000 per cent. | Prices went up 1,369 per cent between January and November last year, according to figures released by the opposition-led Congress, which estimated the 2017 rate would top 2,000 per cent. |
Economists generally say a country is in hyperinflation when the monthly rate tops 50 per cent for three months, or annual rates remain above three digits for three years. | |
Venezuela’s central bank reported inflation of 180 per cent and 240 per cent in 2015 and 2016, which had been the highest on record. It has since stopped publishing inflation data. | |
Opposition politicians say President Maduro’s refusal to overhaul Venezuela‘s state-led economic model and stop excessive printing of money will create more misery in 2018. | |
The President, however, spent much of his half-hour address blaming others for the country’s woes. | |
He said foreign and local media were spreading “negative propaganda” while Venezuela was facing “attacks” on its currency, and there were attempts to “sabotage” its oil industry. | |
Hundreds of Venezuelans took to the streets in parts of the capital Caracas last week to protest a shortage of pork for traditional Christmas meals. | Hundreds of Venezuelans took to the streets in parts of the capital Caracas last week to protest a shortage of pork for traditional Christmas meals. |
President Maduro’s government had promised to provide subsidised meat to Venezuelans at the end of a fourth year of recession, but in many parts it did not materialise and frustrations boiled over. |
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