Nicaragua’s basic food basket exceeds 15,000 Cordoba, and the minimum wage increase barely reaches 3%
The increase in fuel prices resumed the upward trend this weekend, which caused the basic basket of products to become faster and more expensive, and the price of the basket exceeded 15,000 Cordoba, equivalent to US$429, at the official exchange rate. In this way, the gap between the income that most Nicaraguans earn and the income they can buy has widened.
In the first two months of 2019 and 2020, the basic currency basket decreased by 150 and 56 Cordova from December of the previous year. However, this trend has changed in 2021, with an increase of 506 Cordova during the same period. According to the National Institute of Development Information (Inide), the current price of a basket of 53 products is 15,032 Cordoba.
This increase hits families even harder, such as the “Alondra” teacher’s family, which we call “Alondra” for safety reasons. Before the total value of the basic basket increased, even if his full salary was 8,680, he could not pay it, and now it is much less.
Teachers who have worked in the public education system for more than a decade explained that because they cannot meet all needs, teachers must prioritize what they want to buy.
As far as he is concerned, he has the support of two other people who have contributed to his home, where there are two children. However, several of his colleagues are facing greater financial difficulties because they are the main source of income for the family, and because the salary cannot adjust their lives, they must teach private lessons at home or in other schools. They are also committed to their own Extra work and nothing to do with teaching. They are a strategy to complete the current cost of living.
- Gasoline and diesel prices have risen by more than 35%; Operators: “If there is no echo, you will be unemployed”
“Alondra” complained about the price increase of different products because he knew that these price increases were much higher in the northern part of the country where he lives. For example, he told him that he paid 400 Cordova for the last tank of liquefied petroleum gas (LPG), and worried that the next one would be more expensive due to increasing fuel.
According to data from the Energy Research Institute of Nicaragua (INE), a 25-pound liquefied petroleum gas tank is the most consumed type of houses in Nicaragua. The price in January was 301 Cordoba, but by March 14, the price For 353 Cordoba. . As far as the Economist is concerned, they agree that although there are other factors affecting the rise of the basic currency basket, the main factor is that the price of gasoline and diesel has risen by as much as 35%, which affects all its derivatives and the economy. General.
In the past few years, fuel prices have been fluctuating. There have been several weeks of rising and some falling, but now “the increase is continuous and obvious”, which has led traders to increase product prices. This is part of speculation. explanation of. Economist Luis Murillo.
For another economist, Oscar René Vargas (Oscar René Vargas), fuel prices have a direct impact on the final food cost because it increases the value of transportation. In November 2020, the average price per liter of diesel used for cargo transportation was 26.17 Cordoba, but it is currently 31.40 Cordoba.
- Carriers are dissatisfied with the continued growth of fuel
Experts in the field of hydrocarbons, consulted in the previous few weeks Top secret, They explained that there is no technical or economic justification for rising fuel prices. However, no national entity, including the National Bureau of Statistics (INE) as the regulator, has ruled on the matter.
Economist Maykell Marenco explained that due to the 2% depreciation of the U.S. dollar against Córdoba’s U.S. dollar, Nicaragua’s basic food basket has maintained a natural growth rate because of the 2% depreciation of the U.S. dollar against Córdoba’s dollar. The decline in international oil prices is not expected to translate into a basic package of price declines.
He said that this behavior is also obvious in fuel, because when international oil prices fall, the increase in fuel prices at the national level is different from when they rise.
- The government seizes nearly 60 million Canadian dollars from taxi drivers in Managua every month, and gasoline prices rise
The minimum wage cannot cushion the cost of the basic basket
The salary of “Alondra” has been frozen for three years. 8,680 Cordoba, equivalent to US$248, is only enough to cover more than 50% of the basic basket. For other workers who barely cover 30% of their household basket, this situation is even more precarious.
This is the situation of artisans and tourism workers in the agricultural sector or micro and small countries, whose income has hardly increased by 1%, that is, as of March 1, their monthly income is equivalent to 126 US dollars and 133 US dollars, respectively. .
In other sectors, the growth rate is 3%, According to a tripartite agreement formed by the government, it is composed of Sandinista employers and trade unions. Economist Vargas considers them “poor workers” because the wages they earn are so low that their purchasing power has declined, and the situation is even worse for people who live informally.
He said: “All of this will lead to greater poverty and more inequality.” He promises that the situation will be more severe, but this is offset by the “social buffer” of household remittances. According to data from the Central Bank of Nicaragua, despite the pandemic, the amount of remittances reached US$1.85 billion last year.
Murillo insists that the increase in the minimum wage is “just a joke” because it cannot compensate for the increase in the basic food basket, but will cause a loss of purchasing power. He said that the trend of rising prices has always existed, but this trend has been accelerated by the bad policy of increasing petroleum derivatives.
Other factors affecting this growth are the tax reform approved by the Ortega regime in March 2019. The bill removed exemptions for several basic consumer products. In addition to speculation on economic entities, it saw an increase in fuel.
“One of the factors leading to the deterioration and increase of the basic currency package is the bad policy of oil derivatives and the continued price increase of the regulators. Very good, thank you. No intervention. Murillo said that they did not put their hands on their conscience. Is affecting the entire economy.
Although the price of the basic basket has risen in general, the rise has been more pronounced in certain products (eg eggs, dried cheese, oil and beef postal). For example, in December last year, the price of a dozen eggs was 57 Cordoba, and the current price is 60.85; the price of oil per liter rose even more, 41.67 in December, and 53.20 Cordoba in February this year. According to INIDE’s official data, nearly 12 Cordova has been added.
Social unrest caused by hiking
The increase in the price of petroleum derivatives and its collateral effects have caused annoyance among the transportation sector, individuals and ordinary people. They expressed dissatisfaction with social networks, but they did not translate into specific protests. Oscar René Vargas, also a sociologist, explained that there is a lack of leadership to expose these claims. He warned: “Dissatisfaction exists, and it may break out at any time.”
According to CONFIDENCIAL, the taxi industry is one of the most affected areas. Although losses have been reported, no accurate signals of protest have been given.
In Nicaragua, any sign of protest against the Ortega regime will face police suppression. U.S. agencies that have been sanctioned for violating human rights maintain the deployment of special forces in important areas such as Managua, Masaya, León, and Esteli, with the main purpose of eliminating peaceful citizen protests.