CARACAS (AFP) – Economists said Venezuela has come out of a four-year cycle of hyperinflation, but citizens like pensioner Humberto Reco are still waiting to see the evidence.

The crisis-wracked South American country ended 2021 with inflation of 686 per cent, according to the central bank, meaning the end of a period of hyperinflation that began in 2017.

Walking through the popular Chacao market in Caracas, Reco does not see any positive effect on prices.

“They say hyperinflation is over, but where I am, it’s still there,” said Reco, 75. “Honestly, I don’t see any improvement.”

Venezuela’s inflation remains the highest in the world, and prices are continuing to rise uncontrollably.

According to a widely accepted definition of hyperinflation from 1956 by late United States (US) economics professor Philip Cagan, it begins when monthly inflation rises by more than 50 per cent.

To come out of it, a country needs to keep monthly inflation increases under 50 per cent for an entire year, Cagan proposed.

“According to Cagan’s figures, we’re already getting out of hyperinflation,” professor of economics at the Metropolitan University in Caracas Hermes Perez told AFP.

However, US economists Carmen Reinhart and Kenneth Rogoff proposed a different hyperinflation parameter of 500 per cent a year.

According to them, “there’s a little more to go,” said Perez.

What is clear, though, is that Venezuela’s official inflation figures are heading in the right direction.

The country ended 2017 with 862 per cent inflation before it spiralled out of control in 2018, reaching a mind-blowing 130,000 per cent.

LONDON (AP) – Britain’s foreign minister expressed optimism on Friday that there is a “deal to be done” to resolve a Northern Ireland trade dispute that has soured the United Kingdom’s (UK) relations with the European Union (EU).

Foreign Secretary Liz Truss struck an upbeat tone after her first set of talks with European Commission Vice President Maroš Šefcovic, the bloc’s chief Brexit negotiator.

“We have had constructive talks with the EU. We are now going to go into intensive negotiations to work towards a negotiated solution to sort out these very real issues for the people of Northern Ireland,” Truss told broadcasters.

In a brief joint statement, Truss and Sefcovic said their talks had been “cordial” and they had agreed to meet again on January 24 after “intensified” talks between their officials next week.

Since Britain left the 27-nation bloc in 2020, relations have soured over Northern Ireland, the only part of the UK that shares sharing a border with an EU member. As part of the divorce deal, the two sides agreed to keep Northern Ireland inside the EU’s tariff-free single market for goods to maintain an open border on the island of Ireland – a key pillar of Northern Ireland’s peace process.

That created a new customs border in the Irish Sea for goods entering Northern Ireland from the rest of the UK even though they are part of the same country.

The arrangement has brought red tape and supply problems for some businesses, and it has angered Northern Ireland’s British Unionists, who say the checks undermine Northern Ireland’s place in the UK and destabilise the delicate political balance on which peace rests.

Truss was appointed Britain’s lead EU negotiator last month after Brexit Minister David Frost quit, citing disillusionment with the Conservative government’s policies.

Brexit negotiations made limited progress under Frost, perceived by many EU officials as an intransigent hardliner.

Truss has struck a warmer tone, though she has stuck to Britain’s insistence that the EU remove its top court from its role in resolving any disputes over the Brexit agreement – an idea the bloc flatly rejects. The UK is seeking major changes to the arrangements and has threatened to use an emergency break clause to suspend parts of the legally binding Brexit divorce agreement if no solution is found. That would trigger EU retaliation and could spiral into a trade war between the UK and the 27-nation bloc.

The EU has accused Britain of failing to respond positively to its “far-reaching proposals” to ease the burden on Northern Ireland businesses.

“I think there is a deal to be done. I do want to make progress,” Truss said. “Clearly if we don’t make sufficient progress we will have to look at the alternatives, but my absolute desire is to get a deal that works for the people of Northern Ireland.”

NEW YORK (AP) – Americans overlooked shortages, spiking prices and uncertainty over the Omicron variant to break spending records during the critical holiday shopping season. But figures released on Friday show that after spending robustly early in the holiday season, consumers sharply slowed their purchases from November to December.

The National Retail Federation, the nation’s largest retail trade group, said that sales surged by a record 14.1 per cent from November and December 2020 to the same months in 2021. Those figures blew away the federation’s projections for growth of between 8.5 per cent to 10.5 per cent, and more than tripled the average gain over the past five years of 4.4 per cent.

“After a dispiriting holiday season in 2020, most shoppers were absolutely determined to enjoy themselves come what may,” said Managing Director of GlobalData Neil Saunders.

Yet data issued by the Commerce Department showed that by the end of December, spending had trailed off sharply enough to catch economists off guard and raise doubts about the sustainability of retail sales in the face of Omicron, inflation and persistent shortages of labor and supplies. Retail sales fell a seasonally adjusted 1.9 per cent from November to December.

Spending fell broadly across numerous sectors: Department store sales fell seven per cent, restaurant 0.8 per cent and online purchases 8.7 per cent compared with November.

Many economists expect the caution that consumers displayed last month to carry over into this year and potentially slow the economy. Still, with average hourly pay rising and unemployment rate steadily dropping, analysts say spending and growth could pick up, at least modestly, once omicron fades.

“American consumers closed 2021 on a very sour note,” said Senior Economist at BMO Capital Markets Sal Guatieri.

“That said, high household savings, strong job growth, and improved confidence once the latest COVID wave crests should put consumers back on a high-spending track in the second quarter.”

Retailers warned for months that their supply chains had become snarled as the nation swiftly emerged from the pandemic recession, and they urged consumers to shop early for their holiday purchases. It appears that many Americans took heed and, in effect, moved up the usual holiday shopping period by a month or so.

Commerce Department figure show retail sales jumped 1.8 per cent in October, and on Friday it reported that year-over-year numbers show that retail sales surged 16.9 per cent last month compared with December 2020. For all of 2021, sales spiked 19.3 per cent compared with the previous year.

Some economists caution that the seasonal adjustment of retail sales has been thrown off by the pandemic. Seasonal adjustment is intended to account for the normal spike in shopping in December for the holiday season. This year, though, because many Americans started shopping so early, the seasonal adjustment might have exaggerated any December spending retreat.

Some analysts also suspect that shoppers who waited until the end of the holiday season and didn’t find what they wanted and took a pass or they bought gift cards. That spending won’t show up in retail data until those cards are redeemed.

All told, Americans appear to be spending their money differently – and spending more, not less, collectively. Mastercard SpendingPulse, which tracks all kinds of payments including cash and debit cards, reported late last month that holiday sales surged 8.5 per cent from November 1 through December 24 from a year earlier. That was the fastest such pace in 17 years.

“Consumer spending will remain the cornerstone of economic growth this year, but the near-term path will be choppy amid surging omicron cases,” said lead US economist at Oxford Economics Lydia Boussour. Boussour said she thinks that after a soft patch in the first quarter, spending should rebound in the spring on the strength of strong wage growth and savings.

Chief Economist at Amherst Pierpoint Stephen Stanley agreed, pointing to a robust job market, pent-up demand and “a mountainous pile of extra cash to spend”.

“People will spend again once the omicron wave fades,” Stanley predicted.

The Omicron variant has led to widespread worker shortages with many people calling out sick. And supply shortages have curtailed what goods make it to store shelves. Stores and restaurants have slashed operating hours or remained closed on days when they had previously been open.

This week, Lululemon warned that fourth-quarter sales and profits will likely come in at the low end of its expectations as it grapples with the variant’s fallout.

“We started the holiday season in a strong position but have since experienced several consequences of the Omicron variant, including increased capacity constraints, more limited staff availability and reduced operating hours in certain locations,” said CEO Calvin McDonald.