Less than two years ago, a cup of coffee cost 450 bolivars in Venezuela. Today, as the nation's hyperinflation continues to skyrocket, a cafe con leche costs 1 million bolivars — or a mere 29 U.S. cents, according to Bloomberg.
Why it matters: The economic devastation in the country, despite vast oil reserves, has led to mass migration, starvation and political unrest. Despite large protests last year, President Nicolas Maduro won a sham reelection with turnout at only 46%, despite the government attempting to bribe voters to the polls.
The big picture: It's nearly impossible to compile the cash needed to grab a coffee given allowances at banks in the country. Back in January, CNN Money's Stefano Pozzebano detailed his attempt to get cash in the Venezuelan capital, ultimately getting 10,000 bolivars — that day's allowance — after visiting four banks over four hours. On that day, less than six months ago, 10,000 bolivars equaled six U.S. cents.
- The exchange rate then meant that $1 would get you about 200,000 bolivars. Today, with an exchange rate of $1 to a little over 3.4 million bolivars, per DolarToday, that same cash allowance is equal to somewhere around a third of a cent.
- The most common note in circulation is 100 bolivars, so you'd need 10,000 of them for your cup of coffee, per Bloomberg.
- The current yearly inflation rate in Venezuela is now 43,378%, according to Bloomberg — and the rate over last three months extrapolated over a full year would be a staggering 482,153%.
By the numbers, according to a study by Project Syndicate's Ricardo Haussman last year — before the nation's hyperinflation kicked into high gear:
- The minimum wage declined by 88% from 2012 to 2017 when compared against the black market exchange rate.
- The median worker wage could only purchase 2,740 of the cheapest available calories per day as of the end of 2017.
- "Meat of any kind is so scarce that the market price of a kilogram is equivalent to more than a week of minimum-wage work."
- Venezuela's GDP contracted by 40% in per capita terms from 2013 to 2017 — and that's based off estimates as Maduro stopped reporting economic data in 2015.
From the ground: The New York Times's Andes bureau chief Nick Casey recently visited Venezuela:
- "It's as if people have accepted this is how life is going to be now: little food, not much water, fewer cars because there are no tires."
- He introduces a young Venezuelan girl, Mia, who "is one of about 50 kids at risk of malnutrition who receive one meal a day at [a] soup kitchen, just enough to keep them from the brink — at least for a year, while the program lasts."
Go deeper:
- Venezuela's plight as Nicolas Maduro re-elected.
- The new global migrant crisis is in the Americas.
- Worthy of your time, per the NYT: How to survive when money is worthless.