What does the price of Nutella say about the Venezuelan economy?

At the moment, Venezuela can probably boast the highest price per jar of Nutella, and this is very telling about how deep into trouble their economy is.

Venezuela’s economic crisis has been over a year in full swing, the oil-dependent nation has taken the commodities price slump particularly hard. Not only that, irresponsible fiscal policies have taken inflation to new highs, expected to reach 480% through the remainder of 2016, and 1,640% throughout next year. A trip to the supermarket is the best way to accurately show what these figures mean to the Venezuelan citizen, the case of Nutella, however is perhaps even more telling of the dire situation in which people find themselves to stock their pantries.

A jar of Nutella will currently go for 15,000 bolivars, which will roughly come up to $15 USD on the black market. To put things into perspective it is important to consider that 15,000 bolivars is half the monthly minimum wage in Venezuela.

For starters, this hazelnut and chocolate spread is completely unavailable in supermarkets where it used to be easy to find. Instead, people who wish to buy it will have to go to specialized import stores that illegally ship and sell goods from abroad at inflated prices.

This means that exports are having trouble getting into the country, which is no surprise, the bolivar with which Venezuelan importers pay for their stock is almost worthless by any standard. Those importers which go to the trouble of getting some US dollars might be able to buy the goods, however, they will want a hefty compensation for their troubles, which will run on account of the consumer that ultimately buys the product.

Another option, if you can get yourself there, is to cross into Colombia to do your grocery shopping.

Colombia has opened the border for shoppers, but when looking for much sought after Nutella you will find that for the price of one jar you could get a dozen toilet paper rolls, a liter of cooking oil, a bag of flour, a kilogram of rice, 500 grams of butter, 2 pounds of beans, a pound of lentils and still have some money left over.

It might not net you Nutella but by waiting in line to get into the supermarket on your designated shopping day (decided using your ID card number) you could get some basic goods without having to pay, thus preventing you from spending half your monthly wage on treats. However, many shoppers report that when their turn finally comes, many of the products they want or need are nowhere to be seen.

Nutella, being a non-necessary, replaceable good then serves as a reasonable benchmark against which it is possible to measure the true purchasing power of the average Venezuelan, but the signs point to disaster.

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