Hyperinflated Arepa Index (HAI) XIII: Inflation Does Not Let up

July 12, 2016


I was in Caracas two weeks ago, but kept traveling afterwards, thus I am late in reporting the price increase of the June arepa, which by now does not surprise anybody. Despite the Government’s efforts to limit monetary liquidity, as a way of stopping the parallel dollar, you can see from the graph above that the slope is essentially the same.

The price of the arepa rose from Bs. 1,400 to Bs. 1,600, a 14.7% increase in four weeks, comparable per month to increases in recent months. The one year increase was 400%, roughly in line with values since December.

One interesting fact was that I actually go to two different arepa places and this one has been the most expensive one since I began keeping tabs in late 2014. Not this time, as the same arepa de queso de mano cost much more at the second location. This to me indicates the difficulty people have in setting prices, a characteristic of hyperinflation. I noticed this also in restaurants. By now, supermarkets are crowded at all times. I was told that the supermarket I have been going to since I was like 17 will be shutting down. The owners are simply scared now to handle crowds or risk looting.

The disconnect between Maduro and those that surround him is simply staggering. The party of the “people” no lonegr recognizes who the “people” are. Or what they want…

16 Responses to “Hyperinflated Arepa Index (HAI) XIII: Inflation Does Not Let up”

  1. Mick Says:

    So much for wheel barrows full of worthless cash. The sky is the limit with electronic money.

  2. Ron Larson Says:

    I wonder why there is still inflation? I thought I read that VZ was so broke that they could no longer pay to have notes printed.

    Or are they paying their employees and vendors electronically by just making up digital money, running a huge deficit somewhere.

  3. Any news on the Guri dam and the 2007 Edelco modernisation program…


  4. “The party of the “people” no longer recognizes who the “people” are.”

    Socialism in a nutshell.

  5. You have to convence lots of folks there which talk about “high inflation”, “very high inflation” persistent inflation” and at the end accept Merentes’ inflation definition, and of course, who manipulating MB (money base) half of it no counted as money base but as BCV assets hold by PDVSA. Many of them bad readers of Cagan (1956) seminal paper about hyperinflation……your analysis is clean, I like it, and everyone there will follow easily..

  6. bobthebuilder Says:

    Whilst the point about the difficulty in setting prices is interesting, this raises a question about data integrity. Have you been quoting the same areperia all the way through, or selecting in some way?

    • Yes, the number above is same arepa, same place, just noting the fact that the second place’s price , always well below this one, went over it. In fact, it is Bs. 2,500 more than 50% higher, used to be 30-40% cheaper. Would make no sense to use two places interchangebly.

      • Lobo Says:

        Miguel you should also put the price of the arepa in UsD using the parallel rate. I would bet it would be flat.

        • moctavio Says:

          Not quite, it started at one dollar and now it is 1.6 dollars

          • Mick Says:

            Probably due to the difficulty in obtaining ingredients in conjunction with the price increases. It surely would have been more if you had brought a scale with you and compared it gram for gram.

  7. oneconch Says:

    You’re still in Venezuela and you’re keeping this blog? Isn’t that dangerous? Or does no one in the government read enough English?

  8. Florian Geyer Says:

    Since when do communists ever recognize what the “people” want?

    • Alfredo Says:

      They say We work for “The People” but they also say “We are the people”. No hidden agenda.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: