Shortage index hits the highest level in 45 months

Just like they did early last year, Venezuelan authorities have postponed a decision to revise up the prices of regulated products in order to curb inflation. Such situation has had negative results, particularly widespread shortage of goods in supermarkets and grocery stores.

Venezuela's economic history since 2003 and during the administration of former President Jaime Lusinchi shows that when the government freezes the price of products it prevents entrepreneurs from covering costs and making profits. As a result, companies cut production, and shortage of goods becomes worse.

The Central Bank of Venezuela (BCV) reported that the shortage index climbed in January, adding that 16.2 out of every 100 products that consumers sought in supermarkets and grocery stores were not available in the shelves.

This is the highest shortage index since May 2008, when it amounted to 16.3%, and represents an important increase compared to 12.6% in January 2011. However, it remains far from the record level (24.7%) in January 2008.

In its report, the BCV only said that the upward trend in the shortage of products "usually occurs at the beginning of the year, after the Christmas holiday season."

Jorge Botti, the president of the Federation of Trade and Industry Chamber (Fedecámaras), acknowledged that "there is always a decline in (the supply of products in) January because many businesses close for the holidays and the supply system does not run normally."

However, Ronald Balza, an economist and professor at the Central University of Venezuela (UCV), said that the main cause of shortage is the delayed adjustment of regulated prices.

vsalmeron@eluniversal.com