Not only is the Venezuela hyperinflation now on par with the Weimar or Zimbabwe hyperinflations, but there is now “spillover” effects. Here’s the details…
Socialist Venezuela’s inflation rate is on track to hit a whopping one million percent. As if the government there hasn’t already destroyed a once thriving economy with their force and coercion flinging the population into poverty, the continual rise in inflation will only mean people will have to live in even worse conditions; if that’s possible.
As inflation rises, the standard of living goes down because your money simply doesn’t go as far as it used to. Venezuelans already live in utter poverty thanks to their enslavement by the socialist regime run by Nicolas Maduro. But things could sadly, get much worse in the near future. The government of Venezuela continues to print money to cover a growing budget hole, which will force the inflation rate up to about one million percent, the International Monetary Fund predicted on Monday.
According to Bloomberg, the economic crisis in the Latin American nation is comparable to that of Germany in 1923 or Zimbabwe in the late 2000s. Alejandro Werner, who is the head of the IMF’s Western Hemisphere department, said that he has forecast the economy of Venezuela to shrink 18 percent in 2018, which would be the third consecutive year of double-digit contractions. This comes as oil production falls significantly as well. “The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blog post.
While hundreds of thousands of Venezuelans flee hunger and surging prices, President Nicolas Maduro has maintained that the crisis is a result of an “economic war” waged by his political opponents at home and abroad. But the fault lines in the government’s control of the population and the stranglehold on the economy.
Bloomberg’s Cafe Con Leche Index, which tracks the price of a cup of coffee served at a bakery in eastern Caracas, estimates inflation was over 60,000 percent in just the past year and it is picking up speed now. Cafe Con Leche Index posted an annualized rate of almost 300,000 percent in the past three months.
There doesn’t appear to be any reprieve for those living under the thumb of the authoritarian dictator in Venezuela either. But since many have had no choice but to return to the barter system, perhaps they will at least survive the government’s horrific economic devastation.