CARACAS (AFP) - President Nicolas Maduro announced on Monday that Venezuela's miniumum wage was being hiked by 10 per cent in a bid to keep up with Latin America's highest inflation rate.
At 56 per cent a year, this oil-rich yet economically turbulent Opec member state has the highest inflation rate across the Americas.
"I have decided to start January by implementing a salary increase of 10 per cent, effective in January," Mr Maduro said in an address to lawmakers at Miraflores presidential palace.
The government considers Venezuela's minimum monthly salary of (the equivalent in bolivars of) US$519 (S$658) a month Latin America's highest.
But that is only if you use of the official exchange rate or 6.3 bolivars to the greenback. Factoring in the black market dollar exchange, people earning the minimum wage actually net 10 times less - about 51 dollars a month.
The government estimates that growth in 2014 in the socialist-run South American nation should hit four per cent, and inflation some 26 per cent to 28 per cent.
Analysts attribute the nation's high inflation to rigid currency and price controls that were launched in 2003 by late president Hugo Chavez, who died in March last year.
The government has fixed the exchange rate at 6.3 bolivars for US$1, fuelling the black market where the US currency is obtained at up to 10 times the official rate.
Heavily dependent on imports, Venezuela has been plagued by shortages of basic goods ranging from meat to toilet paper.
Meanwhile it has continued to send billions of dollars in cooperation funds abroad to allies, especially its closest in the region, Communist Cuba.