07-14-18.-The National Academy of Economic Sciences (ANCE) published a statement calling for "alert" to the country, to the "persistence" with which the national government "maintains policies that nurture hyperinflation," the which, in the opinion of the organization, condemns Venezuelans to "growing hardships".
In this sense, he denounces the economic crisis that plagues the country, and argues that "the recurrent decrees of raising the minimum wage, as well as the invention of special bonds to be delivered through the country's card, have not prevented the collapse in the purchasing power of remunerations ".
Likewise, the letter indicates that "the increases decreed rather accentuate hyperinflation. Faced with the fall in the real income of the Treasury, they are financed by monetary issue of the Central Bank ", thus aggravating the situation of the national economy.
"In this context of terrible damage caused to the Venezuelan population, to continue arguing the existence of a supposed" economic war "to maintain current policies does nothing but hide the true reasons that cause these calamities," the statement said.
Next, the full text:
The National Academy of Economic Sciences (ANCE), alarmed its members to the persistence with which the government maintains policies that nourish the hyperinflation that today condemns Venezuelans to increasing hardship, feels obliged to alert the nation, in compliance with its mandate legal, on the determinants of such a lamentable situation.
The episodes of hyperinflation documented in the 20th and 21st centuries are associated with the accentuated expansion of monetary variables and severe crises in the external sector. Overcoming these episodes has required, by force, to correct these macroeconomic imbalances.
The recurrent decrees of increase of the minimum wage, as well as the invention of special bonds to be delivered through the Carné de la Patria, have not prevented the collapse in the purchasing power of the remunerations. During 2017, seven increments of the integral minimum wage were decreed1, with a total increase of 778%. However, the inflation recorded by the National Assembly was 2.616%, so its purchasing power was reduced by 66.4%. During the first semester of 2018, three upward decrees have increased this salary by 552%, but inflation registered until the end of June exceeded 4,500%. Therefore, its purchasing power has already decreased by more than 80%. This trend has practically destroyed every advantage of the new monetary cone announced.
Decree increases rather accentuate hyperinflation. Faced with the fall in the real income of the Treasury, they are financed by monetary issue of the Central Bank, aggravating the imbalances between a demand bulked by the injection of money into the economy without support and an offer of goods and services that has been significantly reduced since 2013.
Almost all episodes of hyperinflation referred to have lasted a few months. This is not, however, due to corrective effects internal to the economy that are unleashed when a certain threshold is exceeded, but rather due to a political response to the pressures caused by the terrible costs that it throws on the population. Venezuelan hyperinflation is entering its eighth month. Regrettably, there is no political will to take the measures that are required to eradicate this scourge.
The National Assembly reformed in 2016 the Law of the Central Bank of Venezuela to rescue its fundamental objective of "achieving price stability and preserving the internal and external value of the monetary unit" (Article 318, CRBV), prohibiting financing Monetary value of fiscal deficits, driving price hike. Unfortunately, the Supreme Court of Justice declared this reform "unconstitutional".
Finally, price controls aggravate the hardships, promoting shortages, unemployment and further deterioration in the living conditions of Venezuelans.
In this context of terrible damage caused to the Venezuelan population, to continue arguing the existence of a supposed "economic war" to maintain current policies does nothing but hide the true reasons that cause these calamities: the insistence on executing economic policies pursuing objectives of political control, which in no way contribute to stability, growth and social welfare.
Reiterating what was stated in our public statement of last May 9, we consider it unacceptable "to oppose particular political objectives and / or interests of entrenched groups in the decision-making nodes of power, to the need to peremptorily overcome the grave sufferings of the great majorities. The country has the resources, the talents and the willingness of investors, national and foreign, to get ahead, provided that the appropriate measures are implemented. "
The National Academy of Economic Sciences urges the National Executive to rectify its policies as soon as possible in order to reverse the fatal deterioration in the living conditions of the Venezuelan. In Caracas, on the fourth day of the month of July 2018.