Inflation in Venezuela is real

INFLATION IN VENEZUELA IS A FACT

Carlos Mora Vanegas

Already, many countries would like to possess the great natural resources the country has an oil that favors their income and a rise in the value of a barrel in dollars without Parragon in Venezuelan history.

Yet despite all this, Venezuela faces serious inflationary crisis that involves variables that seriously affect the purchasing power of Venezuelans in general without exceptions

Variables such as the money supply, supply, demand, exchange control, state constraints, the trade balance among others have been seriously affected those living in the country.

Well it looks Pedro Montero, when he says that Venezuela is now the country with higher inflation across the continent, overtaking, and almost twice the rates of the other nations of America, reflecting this that policies to combat inflation, by the current administration have not been as effective as we wanted.

Another fundamental aspect is rising discontent that has been causing the population at the time of going to buy their supplies, and getting many empty shelves causing to be visited different places to complete their purchases, the constant variations prices. .

William Vasquez, an economist graduated from the University of Carabobo, a Masters in Business Economics (Microeconomics), a specialization in International Development Cooperation of the University Complutense of Madrid and a Ph.D. in economics from the Universidad Autonoma de Madrid, and current professor at UC, he says, that "the increase in inflation affects us all, and as the saying goes, inflation is by elevator and stairs wages, initial estimates of this year and were overwhelmed and are expected to be higher than last year. The segments of the middle class, are those most affected, as the members of the segments, D and E, so are their consumption habits will not be so inflationary shocks, and this, because, generally, devote most of their income on food and this sector is heavily regulated?.

Vazquez added that "The Government is obligated to spend, because it has money, but with a lot of unmet needs that have to meet, but have not implemented activities for the supply of goods and services grows, and that is the presidential address is anti-private enterprise, which discourages the investor and does not generate any good making the offer to contract?.

Montero added that Vazquez says, that a serious problem currently live, is the hoarding, to which the professor replied with: "The hoarding is a result of inflation and low competitiveness and competition that exists in the Venezuelan economy, hoarding is a natural response to the State generates imbalances in the economy and how to fight it is to promote competition and develop policies to increase the supply?.

Somehow the Chavez administration needs to reduce inflation rates, it is believed that the new way of calculating the consumer price index at the national level can alleviate this indicator, our interviewee believes that? A consumer price index of Caracas is not representative of the whole country, since the characteristics of the capital of the republic are very different from that of any other city, since the components and inflationary pressures are not the same, it is desirable that an index domestic price, the downside of this is to be the National Statistics Institute (INE), attached to the executive office who collect and process information, so you may have to follow guidelines that favor the government's actions, which does not permit rely on that index, besides not having the technical capacity and experience that has the Central Bank of Venezuela (BCV). It definitely is an agent that has tilt and bias towards a result which is not fully reliable?.

According to Vázquez, inflation does not reach 28 or 29% it is believed, but is about 22% that it is too tall?.

For its part for the teacher and economist Innocent Sanchez, who has a Masters in Banking and Financial Management and a Ph.D. in Philosophy, awarded by nomination by the Graduate School of Bussines, University of Wisconsin in 2003, gives his impressions about the new way of calculating the consumer price index and inflation for this year.

Notes, as Montero tells us, in an interview that he did Deproimca that "Inflation is a new methodology to calculate and so far it was working with the consumer price index from the city of Caracas as a national indicator , but government regulation is replaced by the? National Index of Consumer Prices, the fundamental difference being that the previous sample was only of the Greater Caracas and is now working on the basis of 10 cities, thus obtaining a more accurate index reality of inflation?.

For Dr. Sanchez: "At the rate gaps are noted, the first is that until now was the Central Bank of Venezuela, who performed this work, taking all the necessary experience and that made it since 50, and now be the INE, who made the index, despite institute that has experience in surveys, does not have the same experience that has the BCV in macroeconomics, but that's a weakness that can be corrected over time?.

Another aspect that causes concern is that: "Until now we used a method of arithmetic means and with the new methodology are changing to a geometric mean, and this will affect the methods and geometric statistics are what they are trying to smooth the numbers, therefore could be an adjustment but hopefully this is not enough distorting. We saw the results of the first quarter of the national rate was very similar to what the rate of Caracas courage?.

Dr. Sanchez believes that "The INE is an entity that continues Executive policies, but things are doing well, the sample is being collected and as well the BCV INE staff was well trained, hopefully now be as professional enough not to alter these statistics, in short is a joint effort of the BCV and INE and the results so far yielded no major variations?.

Montero points out in his interview with Sanchez, that: "For this national index as the index of Caracas are using the same 13 items, the dual procedure is the same, take the price lists of commercial establishments and take samples home to see where they are for consumption

Regarding what to expect inflation this year, the Economist commented that "The government talks of 12% inflation, then have risen to 19% after 7.1% accumulated in the first quarter, it was impossible to keep the original figure and my projections to March give me 33% for the year, but must wait because you are including a distorting effect and none other than the issuance of three trillion dollars in government bonds to 18 and 20 years, which is issuing the Government and without saying a distorted because a devaluation is introducing that affect food supplies, medicines and importing capital goods because it is made just for this purpose