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Venezuela to hike minimum wage 15 percent amid high inflation

Published 04/11/2014, 00:59
© Reuters Venezuela's President Nicolas Maduro speaks during a meeting at Miraflores Palace in Caracas

CARACAS (Reuters) - Venezuelan President Nicolas Maduro announced on Monday a 15 percent increase in the minimum wage starting in December to protect workers from inflation of more than 60 percent.

Maduro blames soaring consumer prices on an "economic war" launched by foes of his socialist government, frequently accusing business executives of price-gouging, hoarding and speculating.

Critics, though, say Venezuela's endemic inflation problem is evidence of the failure of 15 years of socialist economics under Maduro and his late predecessor Hugo Chavez.

"I have decided to accept this proposal, from the workers, to decree a 15 percent rise in the minimum salary from Dec. 1," Maduro said during a televised event with workers.

Maduro said the cumulative raise for 2014 - following a 30 percent hike in May and 10 percent in January - would compensate for inflation caused by the "criminal" campaign against him.

The wage hike planned for December would put Venezuela's minimum salary at 4,889 bolivars. That is equivalent to $776 (485.97 pounds) at the lowest official currency rate of 6.3 bolivars to the dollar, but just $49 at a black market rate quoted on illegal web sites.

In the last data available, Venezuela's annualised inflation rate reached 63.4 percent in August, with consumer prices rising by 3.9 percent that month, according to the Central Bank.

© Reuters. Venezuela's President Nicolas Maduro speaks during a meeting at Miraflores Palace in Caracas

Oil-dependent Venezuela's inflation malaise is a decades-old problem, also surpassing 60 percent in the 1990s before Chavez, according to IMF data.

(Reporting by Diego Ore; Writing by Andrew Cawthorne; Editing by Cynthia Osterman)

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