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(Bloomberg) — Venezuelan inflation is skyrocketing as US President Donald Trump ratchets up his campaign to financially isolate the socialist regime in Caracas.
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The inflation rate soared to 556% in the 12 months through Dec. 17, up from 219% at the end of June and 45% in 2024, according to a weekly index compiled by Bloomberg News.
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The gauge, while rudimentary, given it only measures the price of a single product (a cup of coffee sold at a Caracas bakery), serves as the best real-time proxy for inflation in a country that stopped releasing data regularly a decade ago to mask its economic collapse.
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For months, Trump has been stepping up pressure on the country in a bid, in part, to oust the long-time socialist leader Nicolas Maduro. On Tuesday, Trump ordered a blockade of sanctioned oil tankers going in and out of the country, a move that stands to further throttle the local energy industry and choke off the government’s main source of hard currency.
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“The shock to them will be like nothing they have ever seen before,” Trump wrote in a social media post.
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Inflation, to be clear, has been far higher in Venezuela at different times in recent years. The Bloomberg index, which was launched in 2016, has posted annual readings of well over 100,000%.
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Moreover, many Venezuelans are immune to the surge in prices in bolivars. Tired of using a currency whose value was constantly eroding, scores of Venezuelan businesses started to both pay staff and demand payment from customers in dollars. Today, an estimated 90% of private-sector workers earn in dollars, helping them maintain their purchasing power.
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But for government workers, pensioners and all other Venezuelans who are paid in bolivars, the inflation spike represents the latest blow in a crisis that’s pushed millions to flee the country.
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