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Venezuela increases minimum wage

Published 02/05/2015

Venezuela's president Nicolas Maduro plays the drums as he arrives for a May Day rally in Caracas (AP)
Venezuela's president Nicolas Maduro plays the drums as he arrives for a May Day rally in Caracas (AP)

President Nicolas Maduro raised Venezuela's minimum wage for the second time this year to help workers being battered by the world's highest inflation.

Speaking at a May Day rally, the socialist leader said he is boosting the minimum wage and pensions for pensioners by 30%, with two-thirds of the increase coming this month and the rest on July 1.

He also said he would raise salaries for government employees and military personnel.

The wage increase, while a welcome relief for many workers, fell short of expectations that the embattled Mr Maduro might use the celebrations to expand state control of the slumping economy.

In recent days, Mr Maduro has stepped up attacks on the country's business elite, prompting the head of the nation's biggest food maker, Empresas Polar, to publish a rare public letter to the president calling for dialogue.

"Sometimes we don't see the face of the monster that wants to destroy the economy and irritate the people," Mr Maduro told supporters at yesterday's rally.

He promised more measures in the coming days that he said would wrest control of the economy from the "oligarchs" and "big wigs" who he accuses of trying to topple the government.

The pay increase follows a 15% hike in January and will take Venezuela's minimum wage to 7,324 bolivars a month. That is about £767 at the country's official exchange rate but less than £20 at the black market rate widely used to set many prices.

Economists say the wage increases are only likely to feed the inflationary spiral that coupled with widespread shortages of goods is wreaking havoc on Venezuelans as the oil-dependent economy struggles.

Inflation last year totalled 69%, the highest in the world. And with oil prices down by a third from a year ago, the amount of dollars available to pay for importing goods ranging from car parts to toilet paper has fallen sharply, leaving reserves of international currencies at their lowest level in nearly 12 years.

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