Venezuelan inflation is soaring as US President Donald Trump intensifies his campaign to financially isolate the socialist regime in Caracas.
The inflation rate jumped to 556% in the 12 months to December 17, up from 219% at the end of June and 45% in 2024, according to a weekly index compiled by Bloomberg News.
The indicator, although rudimentary — as it only measures the price of a single product (a cup of coffee sold in a bakery in Caracas) — serves as the best real-time parameter for inflation in a country that stopped publishing data regularly a decade ago to mask its economic collapse.
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For months, Trump has been increasing pressure on the country with the aim, in part, of ousting longtime socialist leader Nicolás Maduro. On Tuesday, Trump ordered the blockade of sanctioned oil tankers entering and leaving the country, a move likely to further strangle the local energy industry and cut off the government’s main source of hard currency.
“The shock to them will be like nothing they have ever seen before,” Trump wrote in a social media post.
It is important to clarify that inflation has been much higher in Venezuela at other times in recent years. The Bloomberg index, launched in 2016, has already recorded annual readings well above 100,000%.
Furthermore, many Venezuelans are relatively immune to rising prices in bolivars. Tired of using a currency whose value was constantly deteriorating, dozens of Venezuelan companies started paying salaries and demanding payments from customers in dollars. Currently, it is estimated that 90% of private sector workers are paid in dollars, which helps preserve their purchasing power.
However, for public employees, retirees and all other Venezuelans who receive their income in bolivars, the spike in inflation represents the latest blow in a crisis that has already driven millions to leave the country.
