Archive for July 26th, 2015

Hypeinflated Arepa Index (HAI) Part VII: Inflation Accelerates

July 26, 2015

ArepaJulyI arrived to Caracas thinking that after the big jump in the price of my favorite arepa, the arepa de queso de mano (hand cheese, a uniquely Venezuelan cheese) in the last two months, there would be a lull and the pace of increase would slow down.

But it was not to be, the price actually jumped 46.7% since five weeks ago, a jump actually quite similar to that of the April to May change. At this pace (average so far in seven plus months), we would be at Bs. 675 by November 17, the first year anniversary of the index, which would be a 337% increase in the HAI (Hyperinflated Arepa Index) for 12 months, but since it is clearly accelerating (46.7% in 35 days is close to 5,000% per year!), we should see a higher number.

Since some people have asked, I eat this arepa, which is delicious and my favorite, at the same arepera close to where I stay in Caracas, in order to be consistent in the measurements.I will not say which one, to protect my source of these delicious arepas.

That prices are accelerating is very clear to anyone coming here. I always keep a few BillsĀ  to buy stuff on Sundays at the Mercado Libre where I like to shop. I only buy three or four identical things. Well, lately, I have begun paying with credit cards, so as not to run out of cash.

A second observation is that I went to buy bread and there was none in my usual bakery, due to the lack of flour. And at a drugstore, full of empty shelves, I was told the “sought out” item of the moment is toothpaste, either because there are shortages, or because there are rumors that the price is going to jump up. I was also told that when this particular drugstore receives locally made toothpaste, a swarm of “bachaqueros” (the name given these days to anyone that lives off the arbitrage of regulated or scarce products) shows up, mostly in motorcycles, soon afterwards and buys the whole inventory.